No Dividend If this company truly wants to issue a dividend it needs to do some serious thinking about it's longer term shareholders. Dale has indicated to me the company is thinking about the dividend strategy in 2014 and I have express my deep concerns about this. Yes it would attract investors seeking yield but those investors are drying up in the resource sector. It would send a signal that the company is no longer concerned with being prudent with the balance sheet by stretching itself too thin. The capital needed going forward is anywhere from $5 million-???.. if MOST OR ALL cash on the balance sheet is used for this "current" expansion. The company is also listening to people that have approached them for looking at expanding in growth areas such as the north. They have many options ALL of which would require more capital.
I think they should look to the north and buy one of the three "current" processors already in production. Now is the perfect time. Gold is down, Silver is down and the assets which these companies own have decreased in value. The math indicates DEEP value and these are times when companies with great management teams stand out from the rest.
If they takeover the most current operation it would immediately increase there ounces being produced and it would save the many delays and hassles of waiting around for permits trying to build from scratch once again. As soon as they take the company over they should apply for a mill expansion. This would take anywhere from 3 months to who knows a year to have approved, (Based on the current waiting times). Meanwhile they would be generating a large amount of free cash flow WHILE looking to improve the over all costs..ie: installing some newer equipment. This is a truly winning strategy for EVERYONE holding the company's shares. They would use the local bank down there for the capital and greatly improve the relationship and it would be a MAJOR PROMOTION for the company. All kind of buzz would be emanating from this kind of move.
One last point. If the company reads any of these it would also KEEP THE CURRENT PROCESSING PLANT OPEN while undergoing this kind of expansion. The increased cash flow would help quickly pay down the debt in 2 years and would a balance sheet that most others will admire.
I FIRMLY BELIEVE IF THIS STRATEGY IS IMPLEMENTED THEN THE COMPANY WOULD BE TAKEN OVER. MANY ARE LOOKING AT IT NOW BUT IT IS JUST TOO SMALL FOR THE HASSLE.
JUST SIT BACK AND HOLD OFF ON THE DIVIDEND THINKING EVERYONE. GROWTH IS WHERE TRUE WEALTH IS CREATED.
Good luck to all