GREY:NMKEF - Post by User
Comment by
furiousmaton May 08, 2019 10:08am
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Post# 29724065
RE:Peers valuation at Whabouchi suggest NPV above 1.3B CAD
RE:Peers valuation at Whabouchi suggest NPV above 1.3B CAD
feels like you're forgetting the history of this stock.
They're down on their knees for new money now. What deal are they going to cut and what is it going to mean for the common shares? If you're counting on the government to step in, that's already a red flag. That's a roll of the dice. The government may or may not step in at all, if it does, it will likely do it under terms that won't be beneficial to the shareholders at all. They have no reason to play nice with shareholders, politically.
Also this management seems to have been expert at destroying the potential profits of this business, constantly bloating up the scope and technical challenge it presents. And more significantly, in my opinion, they've just proven a few months ago that they've basically been lying about the state and finances of the project. How else would you explain that in the 2nd half of december 2018 they were claiming that everything was on track, that they were well within budget, even considering a significant contingency fund, set to start production within 9 months or less (conveniently, in that december meeting, they asked shareholders to grant them significant pay raises, based on their good management and consistency in meeting deadlines and budget constraints), and that barely 6 weeks later announced that they had 375M missing.
That's already a huge miscalculation in the overall project estimate. But what error does that represent on the value of what was supposed to be left to do in that project? 70%? More? When that news dropped I didn't even bother going back to the books and doing the maths. The lie was just so obvious it wasn't even worth caring about it anymore. God knows how long they've known they weren't on track to deliver at all and just hid it.
So there's no reason to trust anything they're saying at this point. This means walking on thin ice. You're assuming a lot, including that the numbers you're using are accurate. And that's something I wouldn't do with this management anymore.