throw us a bone, page-38

Its all been over before Recyug. It always makes me laugh how management have done such a wonderful job getting FML from a 5,000oz producer to a wonderful 175,000oz producer, while at the same time shareholder wealth has decreased. It's laughable but I'm sure we will keep hearing about it.

The important facts to remember are FML listed at 20 cents with a market cap of $10m and now have a m/c of $160m but the share price is 3.6 cents. What more is there to say about past performance?

Now forget about past performance, obviously we now judge FML on it's current value.

If you look at the accounts it's clear FML have little cash. In fact the have NO cash of their own.

At last quarterly FML's total group had just $4.4m cash. Forget the enviromental bonds of $12.6m.

Ok so FML have just $4.4m but with a $2m loan facility and Contingent instrument facility owing $3.1m.

The end result - $4.4m cash but owing $5.1m before we even considering the substantial amount owing in accounts payable. Read the half yearly, almost 6 months out of date though. From memory I think it was $40m or was it $30m?

Capital spending has always outweighed earnings and I see no end to that. Let be honest, there's a lot of money still needed to be spent. Barnicoat for one.

Lets have a quick look at the tale of the tape.

2008 (cents per share)
Earnings: -0.5
Capital spending: -1.6

2009
Earnings: 0.2
Capital spending: -1.2

2010
Earnings: 0.4
Capital spending: -1.5

2011
Earnings: 0.2
Capital spending: -1.4

It's very clear that FML isn't growing from "organic growth". FML are spending a lot more than just earnings.

Have a look at this -

Share holder equity

2008
$50.9m

2009
$80.5m

2010
$99.7m

2011
$148.2m

So from 2008 to 2011 FML had $100m to play with from share holders and have spent the lot. That's growth from shareholder equity not organic growth.

FML has stated production will be on par with last quarter but still doesn't stop the rampers adding another 10,000 ounces. FML has also stated production costs will be $10m more than last quarter.

FML has decisions and more importantly costs to progress Empress and also have to prepare Greenfields for production. More "one off" costs or they may expense the costs. Who knows?

What I do know is all these announcements sound like a capital raising to me.