The SAMO dilemma, page-8

Hi Whisky

Your musings are always interesting.

Success at Samo is surely transitional for FAR: I think we all agree that. The Board will have scenarios workshopped with tactics ready to go. It is hard to imagine FAR going much longer without consolidating its register - ‘inevitable’, the Chairman said three years ago - and it is difficult to see a more compelling trigger for that consolidation than the twin towers of SNE approval (formal commercialisation) and Samo. Both events are ‘scheduled’ for December; combined they should see FAR’s share price appreciate considerably. The Board will be keen to strike while that iron is hot.

At that point, FAR’s market cap should be well inside ASX200 territory and although listing would not be formalised immediately, the stock will be on the radar of funds including index managers. They will be far more inclined to buy ‘real’ stock rather than a pumped-up penny dreadful.

At that point, too, there would be plenty of scrip available. That will be more so if FAR raises capital, but from comments here, plenty of retail shareholders would be looking to monetise at least a portion of their investment. (Raises his own hand.) Liquidity won’t be an issue.

I’m sure, though, the Board would be conscious of maintaining the share price at or near the level at which a consolidation is struck. The Admiral has experience of this at Beach, where his Board successfully incentivised shareholders to hold for the immediate post-consolidation period, thereby ensuring an orderly market largely free of daytrade vultures. I envisage a similar scheme for FAR.

First though, let’s catch the discovery horse at Samo before hitching it to the consolidation cart.

OOO