Below is a detailed response from the Managing Director of Robust to questions I put to the company today, responding both to comments made in josimar's post, and also some concerns of mine about the on-market trading we've seen in the last week
"Hello [my name removed], Diana Kosanovic asked me to respond to your email.
First and foremost, I must say that I don't normally respond to comments made in chat rooms as there are often underlying motivations for the comments made, that are not always apparent in such anonymous settings. In fact, I can honestly say I have never once visited these forums for exactly that reason. But, you have raised some legitimate concerns, so let me clear up a few facts:
•Robust owns eight, man-portable diamond drill rigs, two of which are smaller "winkie" rigs tasked solely with drilling out the manganese. We do not normally run all rigs at the same time, preferring instead to use them sequentially, which reduces the downtime between holes. •It should be noted that diamond core drilling is typically much slower than other forms of drilling (such as RC), but it is preferable in our view. Further, for reasons of geography and logistics it does take longer for us to process, ship and assay core than say a project sitting on the Australian mainland. But, to have completed nearly 30,000 metres of diamond core drilling in such a remote location is no mean feat, and certainly would not have been possible using one rig (which I assume was just a throw away line). •Robust made the decision to withdraw from North Romang to concentrate on drilling our oxide project at Lakuwahi. Despite having a healthy cash balance, we do not have access to unlimited human resources on Romang Island, so this becomes our limiting factor when determining where and when to drill. Which begs the question why don't we hire more labour? The answer is, that on a remote island such as Romang there is a very fragile social fabric that can easily be damaged, and so to import people from other parts of Indonesia may cause more harm than good, as has been the case in many parts of the country. Further, even though we had been working in the North for well over a year, it is a vast area that requires a very intensive (and expensive) exploration programme, so we have chosen to develop our most advanced project (Lakuwahi Gold-Silver Oxide), to bring further cash into the business without diluting existing shareholders, before returning to other prospects on the Island. •Turning to the question of "why things seem to be taking so long"? We have taken a single project from pure greenfields exploration into pre-feasibility in around four years. In addition we have defined numerous other prospects for future development. Trust me when I say that this is not an easy task, particularly in such a remote location. The industry average for developing a mine from exploration to production is around ten years, something that many investors are either unaware of, or forget. •As to why people are selling, that is a difficult question. The biggest seller over the past 4-5 months was Macquarie Bank, this decision being more guided by a change of Fund direction than any specific reference to Robust. You would acknowledge that we are a thinly-traded stock, so when there is a barrage of selling, it is difficult to defend oneself. We have tried, noting that we successfully placed the remaining 2 million Macquarie shares to long-term investors, but is an ongoing challenge. The most successful defence is to encourage buying, rather than deter selling, but sentiment towards Indonesian is still negative, despite Robust being better placed than all our Indonesian-based peers. •In relation to your second email, I discovered that a small US-based institution was selling quite aggressively over the past week or so. It has taken me until today to identify them and ascertain that they do not have many shares remaining, so I'm hopeful that we may see some stability in the next few days (unless of course another institution appears).
[my name removed], I can understand your frustration, as I have been similarly amazed that people would see Robust at these levels as a sell. We are cashed-up with a very tight capital structure, a suite of excellent projects, and a largest shareholder and local partner with a voracious appetite for further investment. How many small cap explorers do you know, for example, that have not raised money since 2010? Rest assured we are working hard to drive value, cut costs and seek ways to better promote ourselves, but the important thing to note is that Robust will be around for the long haul, and we will see brighter days again. R's Gary
Gary Lewis Managing Director
ROL Price at posting:
38.0¢ Sentiment: None Disclosure: Held
