I think you are correct gary, not many retail shareholders are...

I think you are correct gary, not many retail shareholders are going to take up their allocations at $1 a share. Let us not forget that this company has not drilled a hole in anger yet, and only a minimum number of rushed shallow holes for due diligence, so effectively it is just an IPO at present. How many recent coal IPO's have listed at $1?

Logic leads me to believe that they will struggle to raise the funds, though I sincerely hope not.

And there are some real issues with CEO re-listing at $1, when you compare them with the price of companies like CKA, GUF, AKM, AFR etc.. why in your wildest dreams would you invest in CEO when you can get these companies for half of CEO's price or less and when they have full boards of experienced international coal executives, and when they are cashed up with money in the bank and no debt, when they have deposits in multiple countries, JORC resources, funding, when they have modest numbers of shareholders and solid registries etc.. etc.. I should not need to go on really, except to say that if you can not understand this then it kind of becomes a Homer Simpson moment... ddd'oohhhh!!!

As for CEO management, the MD is an experienced coal man, but not an experienced MD. The work performed by the other 2 directors should be performed by administrative staff, and not directors. They have no experience in directing a coal company and should not be directors of this company. Mark should have an experienced coal lawyer, and coal accountant/businessman, and coal engineer on the board beside him, not the 2 public servants he currently has. By any standard, this is the weakest board of any international coal company listed on the ASX, AIM or TSX. Effectively, in terms of coal mining knowledge, it is a one man board, and as such, very high risk.

I believe the capital consolidation at this time was a mistake. They are trying to do everything at once, in such a hurry, and that leads to mistakes (in any field of endeavour). A capital consolidation should have been conducted after April 2012, after the options were exercised, in this way the capital consolidation could have been at any level, that is, at 5 to 1, 10 to 1, or anything they desired. They erroneously locked themselves into ASX/ASIC rulings at a 20 to 1 consolidation before actually knowing what the rulings were. This management is actually learning as they go, so there will be more mistakes to follow (which does not mean you should not invest in this company). I believe, in the fullness of time, that they will muddle their way through, and eventually succeed, but it is going to be a rocky journey.

As for the comparison between AKM and CEO at the moment, well it is a no brainer really, AKM have the giant South Gobi behind them as a cornerstone investor and their stock price is beaten down to an absolutely delicious price at the moment, who could resist. CEO is a high spec loose cannon, invest at your own peril (and it just so happens that I like investing in peril, but those who do not have balls of steel should honestly stay away at the moment). CEO is my left field speccy, the small money I can lose without hurting, but if it comes in, then we can all win big, it is the outsider in the race, the grey.

It will be interesting to see how shareholders vote at the AGM. We have to vote for the capital consolidation, even though it was probably a poor decision, the directors have painted us in to a corner with this one, but how will you vote on returning the other 2 directors, will the shareholders continue to develop a 1 man company, and what happens if that man falls over, where is the mitigation of risk (ie. would you only invest in 1 company on the ASX?). I think a lot of company directors bank on your average dumb retail shareholder being young and naive, and not thinking too much about these things, but rather surviving on eternal hope (don't forget, you are not playing the bookies on a racecourse here).

C'est la vie.

Gw

Ferengi Rules of Acquisition (Star Trek DS9)
Rule 46 : Labor camps are full of people who trusted the wrong person.