Discussion with Sunridge CEO Michael Hopley & VP Greg Davis After many hours of discussion with Sunridge CEO Michael Hopley and VP Business Development Greg Davis, I'm more confident than any time on this company and now I have less to worry about my huge investment in Sunridge. I will very briefly highlight what I learned from our long discussion.
Stock Dilution: They need aprox about $30-$40 million for Phase1 (DSO) and that will generate about $100 million with short of period of time (2015). Phase 1 will be financed with non dillution on early (q1) 2015.
Peter G & M&A: They declined to answer if they had any offer that rejected by the company. However based of my best knowledge and like everyone else I can read between lines of PG comments that there were some low bids offer that was rejected by SGC. Eventhough they declined to comment about minor issues between PG & management, I strongly believe that was one of the main issues that PG wasn't happy about it. There is clearly a strategic difference between PG and management. PG is an expert and well exprienced investor. He has made a lot of money by investing to many companies but his investment strategy is based of short term and most of the companies that he invested are ended up delisted (either they are bankrupted or acquired based of my research). As he said many times in his comments that he didn't think he will get stuck or wait this long and for that reason he wouldn't mind SGC to be sold anywhere in the range of 30c-40c since he averaged down below the above price and he would be happy with some investors who entered below the above price. Don't take me wrong, I like Peter G and followed him for long time and I'm not here against him but I'm not happy with his public negative comments against managment and he should have kept his frustration and disagreement privately like all of us for the interst of shareholders.
Management main strategy is to focus to get to production atleast to phase 1a which is not far a way in order to maxmise the company's and shareholders value. So far they have invested more than $90 million and there is no way they will sell it below that price when they are very close to production after accomplishing 11 years hard work in Eritrea. There is huge potential that SGC share price would trade above $1 in early or mid year of 2015 once they start production Phase 1a DSO(Direct Shipment Ore) with $100 million cash flow and with strong support of ENAMCO. And only then they can get high price bid offer that reflects the company's value. This Sunridge time reminds me Nevsun in late 2008 when eveybody was complaining against the company IR and it's CEO Dr John Clark (one of my favourite ceo) when it was trading below it's value. (I bought .42c in late Nov 2008 and sold too early in 10 months on late Sep 2009 for $2.52. if I had waited another year i would sold it at above $7).
Now managment needs to focus to take us to next level by completing EPCM & Mining Licence to start production. Eritrea gov/Enamco work style is working quietly as they did with Nevsun and now with Chinese mining company at Zara and they don't like too much advetising to attract unwanted attention and for that reason I wouldn't support SGC to waste money on PR or hiring KIN communication to promote their company.
Based of my best knowledge and due deligency I beleive SGC share price would trade above .30 cent on Sep or October 2014 and early next year for sure would trade above anyone's imagination.
I'm long with huge investments that accumulated for years and All the above is my personal opinion.
Thanks,
Lucky.