what some folks need to understand imo ... , page-19

Monkey I don't think there was a lot of news in half year. We already knew that cash generation was limited. Here we saw that $6m was generated after exploration and development in the half year. Remember in the following month or so they burned,was it 10m? in cash so those numbers are probably pretty generous.

Sure they retained the dividend. I see they emphasised consistent divs in the recent presentation. That is of course ridiculous. The equity issuance was designed to put more than $90m cash on the balance sheet. Then yesterday they raised another years worth of dividends at 86 cents. Of course dividends are sustainable if you keep issuing! The fact they even talk about dividends in these circumstances makes me suspicious. Its supposed to give the impression of a net cash generating business. I'd rather see well defined guidance, quarterly cash flow reports and then explanations if the guidance is missed. The fact none of those are provided is a red flag for me.

Yesterdays issuance fitted pretty well with my idea that cash needs will be high in the short term. I mean gold has rallied significantly and they still issue more at 86 cents. I struggle to see the reason for needing so much cash on the balance sheet. Even if they plan acquisitions, why not announce more cheap acquisitions and raise then at higher stock price? There was certainly no explanation given yesterday. Does this mean they can reduce the bank facility. Why do they even need the bank facility? Does it have to be drawn. What does it cost, up front fees, running costs?

I know investor will just enjoy the ride for now but if I was a holder, I'd be asking more questions so you understand the underlying story if the momentum in gold and goldies stalls or reverses. What are the cash flow targets now, they used to give them but now just say strong cash generation. What is all the money being raised for if cash generation is strong? Do directors just think the stock is expensive at 86 cents so they sell it? Are they expecting to burn cash turning around the new mines? Or do they just want a buffer in case gold prices haven't hit the floor yet?