RE: RE: RE: I agree IN or OUT no jumping around
Do your analysis on market cap. not sp. Maybe it is better (or worse) but sp tells you nothing particularly when talking about a junior.
I am surprised at the number experienced commentators who refer to the number of shares issued, or alternatively the share price when assessing a company. Rattle is correct that, the market cap, being the multiple of number of shares and sp is the only reliable benchmark of value.
This gives a current market cap of about $64m for Metanor, which, in normal markets is low for what the company owns and is near to delivering. However, management cannot deny, that there has been a considerable loss of confidence in their ability to deliver what the market expects and on time. If the management factor may be perceived to be detrimental to the company's ability to raise the required capital, in order to drill out Barry and also to provide any working capital to energise Bachelor to full underground production, then they should consider other options.......
- The blue sky opportunities for Barry have already been referred to in millions of ounces and a small cap junior such as Metanor should not attempt to overdilute at a low market cap in order to control 100% of this project. If Metanor were to announce that it was to give away 50% of Barry to a JV provider of, say £xm in order to fund a concetrator and 50k meters of drilling, then Metanors share price could easily leap way over its recent highs. In this way, Metanor could clear a significant burden of capital raising from the company and, simultaneously, obtain a stream of concentrated Barry ore for the Bachelor mill.
- IMO, unless management can deliver funding, such as above, then at or below the present share price, Metanor may fall prey to a take over. This may not neccessarily be an unwelcome move, if the alternative is that the company is moribund with directors who have damaged their own credibility and ability to attract capital - at a reasonable price.
There is a real prospect that the gold price could rise significantly in Q4 of 2010 and the company value could "rise with all boats". Management may be hoping for this to assist them in the raising of capital. However, if Metanor does not rise relative to other juniors, then it could be argued that Metanor is slipping further behing other juniors.
In summary, management needs to be decisive, in the interest of shareholders.
Raffles