Initial Due DiligenceHere is my initial DD - to answer another poster, I have been investing for 2 years and really hadn't had time to look at the company in depth during the week - sorry for the poor post quality. I hope to contribute better in the future.
International Frontier Resources
1) Goals and Past/Current Success
Current Stated Goals
“Nominate new acreage in the Central Mackenzie Valley.”
“Focus on oil prospects until clarity on Mackenzie Valley gas pipeline.”
Current Execution
As at Sept 30th 2010
? Cash: 7.04M
? Structure: 59.6M outstanding + 2.2M stock options @ .32 + 2M stock options @ .10
? Current Assets: 7.33M
?Net Revenue (extrapolated to Q4): 442K
?Current Mkt Cap: $5.66M
Previous Execution
As at Dec 31st 2005
? Cash: 12.9M
?Current Assets: 15.01M
?Net Revenue (FY ‘05): 875K
? Share structure: 35.8M +/- 8M warrants
? Approx Market Cap: $70M
Note: Does a 50% decrease in net revenue, a 50% decrease in current assets warrant a 70-90% decrease in the share-price?
Company has enough net cash on hand (cash and equivalents less existing debt) to complete a meaningful exploration program, or acquire a promising property
2) Management and insiders
Management
Pat Boswell: Formed IFR in 1995, over 30 years of experience in the oil/gas industry, pay approx 238K/year (reuters).
Note: Looks like experienced management, who was with the company when it was +70M market cap…can he get it back to those levles?
If anyone has information regarding current insider holdings it would be appreciated. Only thing I found was on Canadian Insider, Pat Boswell acquiring shares in the public market, with no selling
3) Quality of Assets
With the MVP looking like it will become a reality each day that passes, the companies existing properties are very hopeful. The other questions that remain is will government money be put forth to speed up the pipeline or to provide incentives to northern companies to increase exploration?
4) Bargain Investment?
The current stock price is much below previous financing prices (Jan 31st ’07, $11M @ $1.25/share, Nov 24th ‘05, $5.6M @ $1.70/share and Sept 29th ’04, $3.1M @ $1.35/share)
Well there you have it, some of my preliminary DD on the company. I think I like what I see, the only negative is the daily trading volume. Although there have been spikes in the volume in the past months, it has slowed down here. If buyers start stepping up into the .105 or .11 asks I would have no problem putting some money in at those prices. I would rather pay .11 and know someone else has put money into this company than buy at .10 and risk my capital being locked up long term.
Thoughts?