Tired shareholders - or Tired Management?So what we have are a bunch of disappointed shareholders, but they refuse to see that MTO delivered some excellent unexpected results.
The [excellent, unexpected] 43-101 results hit the sp price from almost 0.71c to 0.36 within 5 days of its announcement. To be fair to Ron Perry, after this sp roasting, he was confounded and said words to the effect that “….. markets will be markets……. but that he could not understand why the announcement of a significant increase in gold reserves warranted that reaction….”
What the market perceives is that management has not [yet] demonstrated the ability to prioritize project development with new capital raised at anything close the $1 mark, which it could have raised [based on sp] when the gold price was $600 and Bachelor & Barry reserves were only about one third of today’s level. It seems that no one is disputing the viability of the Bachelor or Barry projects. However, the management’s credibility is shot to such an extent that they have to resort to short term finance raisings, with 7% inducements to promoters to round up investors, rather than being able to raise mine completion capital, at a viable cost, based on the merits of the Bachelor project.
The mindset of the directors appears to have been to raise capital on the premise of an increased sp, as a result of the Barry project. This has clearly backfired. Admittedly, in hindsight, if Barry had been left with 35k ounces in the ground and the shareholders capital had been used to put Bachelor in production, Barry could have been developed from Bachelor cash flow. Moreover, the new capital raised would not have been at the lowest capital raisings, at about the 0.50c level, by a cash strapped management, but more likely could have been nearer $1, without managements “input” in recent years.
If anyone cares to inspect the Q3 MD&A numbers, it will be apparent that Metanor paid $668,359 Financing Fees yet only $369,718 on all the company’s fuel & energy costs extracting and shipping ore.
In summary, the problem is not with the Metanor projects, but with the confidence that the market has, in providing capital to this management, which does not appear to be able to deliver a producing mine at a reasonable capital cost and in a timely manner.
MTO has a new business model and new shareholders will replace the old tired ones eventually.
As stated above, the director’s new business model [prioritising Barry], succeeded in reversing the sp from what it was with gold at less than half today’s price. Accordingly, could it be said that a tired management, who have controlled the decline in sp, should be replaced. I wonder, at what price and how long ago, it would have taken a CEO of the calibre of, say, Sean Boyd, to have raised all the capital needed, at an economic rate, to make Metanor’s projects operational, (even at the level of his Agnico remuneration).
If anyone can provide rational reasons why the present underperforming directors are best suited to taking Metanor forward, then that should be placed on record – however, responses may ensue.