"specky" grows up

Time for a new thread guys?

I have been reading through the threads and putting in some thumbs up for Hatchworks and mongombolo. I will now go through and rate the comments I like accordingly. This is a good page and some savvy comment, wisdom and insight here which is to be expected if you have interest in a company like FML.

I did note the word "specky" used in one post and no longer think this applies to FML. Sure they do not pay a dividend (yet) however any low cost producer in the mid tier level with no debt or hedge does not deserve this tag at all.

Don't confuse the low share price with the status of this company which has already achieved what many never will by getting to this point on their evolutionary path.

The big boys are playing this stock now and the head winds have changed. This larger investor participation started mid last year and will continue. Players using 5M & 10M share blocks can and will push the SP of this one around it is called "trading". The big boys would not be here if this was a "specky".

They leave the real speckies, which have nothing more than prospective dirt and hope, to the gamblers. No - FML has grown up in the past year especially and I wait with excitement as to where they will be in another 12 months.

As to value - yes I agree the current valuation is very low. This is the nature of the markets as already stated elsewhere. FML is currently TRADING at below NAV, in fact barely 75% of conservative ($20 per oz in ground) Net Asset Value which means it is currently a steal.

Their actual free cash flow per ounce is 20x the figure factored into any $200M NAV. SOme of this free cashflow is being used to take FML where it needs to go next which is correct and proper.

The 80k oz PA target for 2010 factors in a mill shut down which is unlikely to eventuate. However Management consider it is better to under promise and over perform especially to maintain support of the insto's. These bigger players add volatility up and down so take advantage of both if you will - I intend to.

As for RISK: What the average mum and dad do not understand is the risk of owning property which, if mortgaged, is nothing more than a futures contract on property prices (in a stage two bubble). Take a good look at the fine print and you will be disturbed to find a "margin call" type option locked in there for the bank. Yes you have to have somewhere to live but my point is about risk.

I will be comfortable to hold FML stock very shortly in my own portfolio and already have clients sitting comfortably in FML.

SP does not reflect the progress of the company and this is when you take advantage. The pendulum will swing the other way and I expect new 12 month highes for FML this year. I hope you enjoy the ride when it starts.

Good luck to all,
CW

Disclosure: I state position due to clients which include indirect holdings.