I don't think TS is moving on anytime soon. He gets quoted a lot for all kinds of things, but he definitely wants the company to be worth $1 billion market cap before even contemplating an exit strategy.
In addition he owns circa 36 million shares and he would want full value for them.
As for CFE the business model is now in place>
1. Buy asset cheap 2. Add value quickly 3. Sell asset for profit whilst maintaining exposure to upside through equity and royalties. 4. Give shareholders dividend / add shareholder value
After Marampa / Sappes and Leichardt i'd expect it will be Pinnacle.
After Pinnacle it could easily be Marampa number 2, and Marampa number 3 etc. don't forget CFE have vast amounts of land being explored in the Sierra Leone Iron Ore Belt which i know he believes is going to be very beneficial in the medium term.
It could also be a takeover of other small /medium projects anywhere in the world, with aim to flip these in similar way to Mayoko... and then another and another.
Long term, CFE is not a miner it is an aggressive venture capitalist company. In 5 years the income from royalties on sold projects could be in the regions 10's of millions of $ alone and even if at this stage the company just sat of their hands it should still be enough to provide a hefty dividend , maybe even twice a year.
I think the SP is lower for reasons stated on many threads relating to the buyback exit and the recent world events. Also don't forget the liquidity of this share is now much more liable to volatile movements.
For example , before the buyback there was circa 630 million shares of which around 150 million were owned by TS & FT (african minerals) which aren't likely to be traded (IMO). This meant that approximately 480 million shares which could realistically be traded at any point - and that assumes that other major shareholders wanted to trade.
Post buyback this figure is down to around 420 million tradable shares AND lets not forget that those shares bought back have most likely been bought from the people most likely to day trade and short term holders.
So a 10% buyback has reduced liquidity by much more than 10%.
As for a second buyback, my only communication on this suggests it is an option provided Marampa sells for a particular amount. I have no idea what this amount may be, but suspect personally its quite a realistic event once marampa is sold.
At this point the potential second buyback would have even greater difficulty in acquiring shares on market unless a major holder wanted out. This would therefore be a significant price driver.
Just my thoughts and got off topic a little, so appologise for that!
Kasper
CFE Price at posting:
56.0¢ Sentiment: LT Buy Disclosure: Held
