Redrocket,You're not alone in your frustration, and I've been a...

Redrocket,

You're not alone in your frustration, and I've been a holder for just as long. There are a number of issues here that do not leave a favourable impression:

* an irritating tendency for critical news or views to come to the market's attention prior to any official news release by WME. This causes a subsequent feeling of anti-climax when the "hyped" news is inevitably deflated or delayed. Classic buy the rumour, sell the fact and lack of momentum stuff. For example, it's not many moons ago that a news article had a quote attributed to the CEO that he felt the resource could contain as much as 100Mlb. And, in time, he may well be right. But you have to be careful in how information passes to the market and after at least two years from the previous JORC release, and delays in releasing peviously-hyped, currently-expected resource upgrade reports, is a shift from 34Mlb to potentially 50lb really going to excite the market? Let's be fair here: any increase in the resource is ultimately good for the company; it's just that I sense that the management of newsflow could be handled better.
* an irritating tendency to over-use trading halts, when the subsequent news is not really of a nature that causes the market to be overly-impressed. Take the recent trading halt associated with the mining lease renewal. Was it for the EPL renewal, the 5% Black Empowerment Movement (BEM) allocation or both or something else? Somebody pointed out that because the CEO was not on the ground, a trading halt was probably justified. But, let's be honest here: the market had been waiting patiently for news of the EPL renewal for months. We could have waited another day for the CEO to touchdown if necessary, given wider market conditions (disingeuously, I had images of Neville Chamberlain in my mind when I read that particular post!). For better or worse, and whether intended or not, a trading halt generally leads investors to think that something MAJOR is in the offing. It's psychological. And in the end, look, a simple news release would have sufficed for what came after. If the trading halt was called more to prepare the market for the news that 5% of the company would be ceded to the BEM: ok, fair enough - maybe this is a material report, but, is moving from 80% of the supposed Marenica project economics to 75% really going to affect investors long-term views, if Marenica is supposed to become the elephant of sorts that has long been supposed? Nah, I don't think so. Whether Marenica turns out to be an elephant or not is not the point raised here.
* Batavia/Polo. The introduction of these "strategic" investors helped provide cash at important moments and the effects on the share prices were positive thereafter. The subsequent disposal of shares into the market so soon afterwards, however, by key personnel associated with at least the latter firm, just leaves the wrong impression. Granted, this is not strictly a WME phenomenon.
* Fat Prophets. I know that this publication is respected among the investor base. You put the whole weight of that respect behind a share and it can have a very strong effect. But mid-way through the exercise, sorry, it just leaves a bad taste to include the caveat of caveats, the covering of one's posterior that maybe the resource won't be economic. Cough, cough. Please Fat Prophets: why bring this up now anymore than when you initiated coverage? What changed, especially as more recent news releases by WME have pointed to an improvement of grades. Tch, tch. Not helpful.

OK, those are the irritations out of the way, and there are probably others, but I want to try to balance this with the following:

* the lag in WME's share price is mirrored by other mining companies in the Namibian/African sector. Bannerman has continued to release positive news and seen it's share price tumble over 25-30% from recent highs; Extract is off 25-30% since those heady-days of AUD11+; ACB, UNX...This gives me the impression that the pullback is broad-based, caused by institutions locking in profits after the sterling run since March/April. I feel that we're consolidating around these levels with the market taking a wait-and-see approach to wider market indicators and the global macro picture. On balance, I remain positive on the fundamental side of the U3O8 stories, and feel the markets will renew the push higher as we approach the end of the year as institutions look to re-position in anticipation of 2010. I'm not so positive on global macro, but if I had to be positioned with a long bias, I still like selective resource space. Just a view.
* while I've indicated my irritation at the way certain things have been handled, on balance, the new management team of WME have brought renewed vigour to the story in the past twelve months. This must be applauded.
* In the long run, I'm not sure how material the Fat Prophets point about economics will be for WME. For starters, economics about resource in Namibia is not just a WME phenomenon. Some - not all - followers of BMN also have niggling concerns given the grades being struck, especially when they look over their shoulders at Rossing South. I understand that if a project is big enough with a long-enough mine life, it is the long-term price of U3O8 that matters rather than the spot price. Feel free to disavow me of this notion if erroneous. Most indications I've seen so far tell me (a) that the long term price should hold its own/rise over the next several years; (b) most of the companies in Namibia are looking at USD30 per lb U3O8 as the approximate cost of exploiting their resource, which is well-below the long term price and should, therefore, provide a decent margin for any company making the transition from explorer to producer as long as the set-up costs are not going to strangle the initiative. Where WME is concerned, previous views on this thread allude to Areva's nearby processing plant not running at full capacity. If this is the case, in my view, WME does not have to re-invent the wheel and can avoid a good chunk of change in any future CAPEX outlay if it were to team up with a company such as Areva, either through offtake-agreements or in a more material clean-up of the share registry, and which is already working with grades which are not any more impressive than WME. To be honest, it is the type of strategic fit for both companies that makes compelling sense. It is just a question of time - whether WME first wants to determine if it has serious primary resource on its tenements or not.
* On fundamentals, as the market is now prepared for resource upgrade in the 50M lb bracket, it is still a 50% improvement on 34Mlb, and if WME was previously cheap (as defined by price / resource in-situ), it has just got considerably cheaper. The company has sufficient cash to get it through its drilling program.

So, overall, it's been an excruciating ride at times, it makes one want to beat one's head off the wall at times, but I don't think this is the time to bail unless there are better alternatives showing more near-term potential momentum, in which case all investors should be looking to take advantage. In the Namibian U3O8 space, in terms of longer-term price potential upside from here as a starting point, i.e. relative value, I think that WME has as much going for it as other companies, especially if the company ultimately makes more of its proximity to Areva. It is just a view.

Finally, while I don't post often, I have valued your posts and those of others here over time.

Good luck to all holders or would-be investors.

G