Final quarter was horrid only a 18.4% GM Revenue was quite good but that was about all.
Lawyer's and Accountant's fees at $345,000 are through the roof!
They LOST money in the 4th quarter. Traditionally one of their best earnings periods.
The board gave out 600,000 @ $0.45 options which was far more than the previous board did. compare (350,000 @ $0.60). It is my opinion that the options should have been expensed at $0.35 not $0.04. This materially changed their earnings. At $0.35 the option expense would have been $210,000 at $0.04 the option expense was only $24,000.
If option expense were treated the same as in 2011 profit would only have been $0.02 per average diluted share not $0.05 as is claimed. So, why are they treating options differently this year? Shouldn't they at least make some explanation?
The shares were heavily diluted in November and were sold at below book value. This my friend is not a sign of management or director competence. Think about it if the company continues to sell shares below book value there will soon be two or three hundred million shares out worth $0.05 or $0.10. The worst of it is, they still don't get it!
I think you agree that management is real, real pathetic about disclosing information. They need a serious tune up. That was probably the single biggest reason that the one institution decided to cash out. The stock world runs on news. It has to be honest, but management has to keep telling its story. Nordex failed at doing this and has lost some of those share holders who expected more.
Despite the forgoing, after the last press release about the expansion, I was a buyer! I will tell you why.
Almost immediately after I bought however, I heard that an estate was putting a block of shares up for sale. Drat! and Phewy.
There were 2 reasons I became a buyer.
Nordex announced a new storage facility but more than that they announced that a mixing plant could also be set up on the site as well. You see, In the explosives business there is a very strict limit to the amount of explosives that can be stored on the property at any one time. There is a big quarry run by LaFarge on the west end of the island. Nordex did not announce the location of the facility whether it is on the east or the west but there is a road off the island which leads to the Sudbury mining district. With the accidents that Rio Vale had last year they need to take steps to improve their safety record.
Nordex has just such a product that would help them. The Johnex line of wall control products are probably the safest and the best in the world. They account for a significant amount of Johnex sales in Australia and were what enabled Johnex to make sales to some of the largest mining companies in the world. Check them out. Check out the Olympic Dam project for size. Johnex has some of the best technical staff anywhere.
History lesson,
Back in the days when most Sudbury mines were owned by INCO Nordex for a year or two was actually the largest supplier to INCO with about 23% of their entire business. That was when the company was really profitable with $0.13 per fully diluted share.
The second reason I bought was that the company finally mentioned the Melba Gold property. That is a little gem of a property sitting back in the bush virtually unnoticed. It was totally absent from the annual statements. I could not find it anywhere. The price of gold has dropped substantially but the company could still gain a pretty penny by optioning that property. I have heard it said that the main conductor on the property was not even drilled.