RE: Time will TellStill has some obstacles to overcome,
- approval of permits for rampup
- sales contracts
- need to get equipment and employees in place
If I have to prioritize the list above, I would say first and foremost the approval of permits for rampup would be critical. Quite obvious I know, but the process to bring New Elk into production does involve ongoing permitting and in my opinion, this is where the gap between the expectations of the stock market and the delivery of news releases is the widest. Obtaining mine permits on a timely fashion is something that management has no control over, however, management should've at least conveyed the material information contained in the first mine permit received in December, 2010. Instead, we were left with an impression that this permit had some correlation with their projection of 500K production in 2011 and ramup by year end to 3.0 mty. Perhaps this assumption was correct or perhaps not, but management should've done much better at communicating the contents of that permit.
As I've stated previously, we shall see by September 2011 whether it is simply a lack of communication from management or whether there is something more material. Perhaps, establishing a more modest start up production rate would've been a better strategy instead of this aggressive/risky plan to reach 3.0 mty. Time will tell whether they will be vindicated or not. At least in the meantime the $86 mil. raised gives me some comfort that they can weather through potentially negative micro/macro situation that we could be experiencing. After all, we all remember how close WTN came to going bust in 2008, don't we?