strategy

BOT that is the story and fair enough I too have spoken to KW and he is as bemused as the rest of us wrt the sp.

Lets look at where the company actually sits:

It has met its milestones, it has a significant drilling programme planned, it has instos on the register, it has secured a port, it has a startup plan for 2mtpa and it has a 511Mt JORC compliant resource. The mind boggles but it sure does seem to tick a lot of boxes.

So the question remains where is the disconnect?? IMO there is some serious misalignment between what retail investors are expecting and what management are actually doing and that in itself is the core of the sp problems.

The REY board are not actually trying to sell the project at the stage it is currently at and that is something that I dont believe the greater market is aware of. There seems to be this view (and I admit I was in the same basket) that the REY board were seeking strategic partners for the start up operation. This is not the case!

So that poses a question where does the 100mill come from to get things up and running, I believe that they have access to around half of that and will need to raise about $50 mill which is problematic at the current sp. They obviously dont need the money this year so where does that leave REY.

I have had to tone back some of my initial exuberance and look at things a bit more realistically. So to get the sp to a level where a cap raising is an option we need to get the oppies in the money and get a sp to around 40c minimum, this is not unrealistic over the next 12 months if the following takes place:

1. Drill the hell out of the basin and get the resource over 1 billion tonnes
2. Communicate the strategy with the shareholders primarily retail shareholders as the instos get face time with KW so are aware of whats happening.
3. Get some instos to buy on market and push the sp which is often a self help strategy as it generates interest and the herd mentality kicks in.
4. Generate some corporate interest in the long term 20MT project as this project timeline could be accelerated with the right strategic partner who is prepared to work with REY but with a longer term view.

I have heard the story before that management job is to manage the company and not the sp. This is rubbish particularly when an equity raising is paramount to the companys long term success. Managing the REY sp goes hand in hand with the REY strategy.

So on a positive note around $400K on market buy gets us back to 20c (im not even looking at what takes us to 10c) If the instos are so supportive and on the register then they know how important it is to get the sp back up over 20c so lets see them really support the company.