RE: RE: RE: RE: RE: No 5mill payment....Hi Wally.
I'm not ready to go that route yet. Yes they dropped the ball but hindsight is 20:20. Were you on the phone to them in July or August pressuring for a PP to get the payment done? I doubt it. Neither was I. We weren't even thinking about the payment at that time. It was just assumed that with a project of this scale that it wouldn't be a problem to get it done. I'm sure Mark had the same feeling. The credit crisis hit fast and it had everyone standing like a deer in headlights. Its easy now to say they should have financed the payment earler, I agree they should have. But take things back to the summer and everybody's outlook was a lot more bullish.
I don't think we would find a better team to move this project forward than the one we have right now because of the jurisdiction they are in and the experience they have there. I agree they should be taking pay cuts. They should be cutting costs. But I don't think outsting them at this point will do shareholders any bit of good other than making some people feel good. The stock price wouldn't go up any faster IMO.
On the dilution front, the PP was not a bought deal. Would you and your group be willing to put up 100k between all of you to invest in the PP? Thats all it would take to eliminate the dilution factor for all of you with combined 5 million shares. Then its a non issue. Increase your holdings by the same percentage as the dilution, it brings your average price down at the same time. If its not closed yet then you may be able to get in still.
The $3 Million is a necessary thing. They need to finance and the market sucks right now. They didn't put a half warrant on it like every other company that is financing right now. All I say on the dilution thing is that its a reality, get in on it and its a non issue. If the financing is so cheap, get in on it. If you own 100,000 shares you'd have to get another 36,000 to offset the dilution an it would cost $2000.
The reality is, if they would have made the payment back in July the stock price would still be close to these levels right now. Look at every other junior metal stock chart. Even look at Vale's stock chart. (RIO.nyse) From $45 down to $12. Everybody has taken a killing in this market not just LGO. Nobody is loaning money right now to anybody. Even if they could have found a commitment for a CAPEX loan, they would have had to do a very very large PP for the equity portion of project funding. Can you imagine them trying to raise $20-$30 million at these prices?? We as LGO shareholders got hit with the worst timeing possible with this credit crisis. It put the handcuffs on and put them on tight.
On MFNB with their 5.5%, they optioned the property together with Largo so on the surface at least, they appear to be on side. Unfortunately with Vale/ODB being the size they are who knows. Cash is king.
I agree with you fully in that Management needs to issue an Update to shareholders on the direction of the Maracas property. Are they in limbo? Are they moving forward as the operator? Are they still negotiating with Vale on somehow getting more ownership? They do need to come clean on what the status of that property is right now.
lurk