RE:RE:RE:RE:RE:Feeling sad & depressed, any chance this hits $1 next year?Phatboy2 wrote
I've been an investor in AR for over 10 years and I feel kicking Dougherty to the curb was akin to throwing the baby out with the bath water. He built the company from a 50 k producer to one that will soon be 8x that amount. He picked up magino for a song from Prodigy gold by capitalizing AR's brief high stock price in 2012. He masterminded the Alio merger. And did all this without miring the company in debt or massively diluting the shares like the current management. Pinning the cost overrun on magino strictly on him was unfair as it was ruthless.
Although I have nothing to back this up. I feel his sacking was likely at the direction of the lenders. Maybe he was an obstacle to this deal that is being rammed down our throats. At the very least I felt he ran a tight ship and was honest and straightforward with shareholders. Compare this to Radford and the current management team. In the press release shortly after Q1 financials, they state they are likely to do debt financing with an equity offering as a last option. I felt this was deliberately misleading shareholders especially in light of the director of communications dumping his shares shortly before the financing announcement.
There was better alternatives to the massive dilution. Streaming, strategic alliances, JV partner, mothballing the project for a couple years so it can be paid out of cash flow, etc. All I can say is the ones who wanted this deal got it - and that was the lenders. Also, I wouldn't be so sure about their intentions to sell the shares to investors. They just as easily sell the company in whole for a quick double or triple. Remember they now have control of the majority of the shares and we're at the mercy of their whims. Personally, I preferred and trusted Dougherty's direction umpteen times more.
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Yes maybe Dougherty made some good moves but having a $480 million project balloon up to whats likely to be around $1 billion before all is said and done is one very bad move and i he as CEO took the fall as he is the head honcho. It could be argued that all the rest of management should have gone with him but then you have nobody with any experience running the operation.
You give Dougherty a lot of credit for building the company but this one Major, Major screw up occured with him in charge not the new CEO who inherited a big mess and is trying to get things straightened out here as best he can. You seem to see a lot of conspiracies everywhere but the fact is this companies shareprice is where it is because of the huge cost overruns with Magino and them scrambling to find financing and selling shares at this cheap a price is what has driven the shareprice down to these levels.
As for shutting down the construction of Magino for a couple years and finishing it with cashflow you need over $500 million to finish the project so that would take aprox. 4 years of cashflow from existing mines to get that much money. Not to mention some of the existing mines are running out of ore thats the reason to build Magino in the first place. As for streams etc. i am sure they tried to look at that but when you need money quickly there is not a lot of time and maybe any potential deals they were offered were worse than what they ended up with.
As for selling the company for two or three times the price they bought shares at they have the same rights as any shareholders to vote anyway they want with there shares that they bought and payed for.
At the end of the day what you think or i think or anyone else here matters little. Management here runs the show and they have the final say to do what they think is best going forward. If shareholders are not happy they can vote them out when the shareholders meeting is held. For those who dont trust management they should sell and move on. Personally i think things are looking up for AR and i will give the new CEO some time to try and straighten out a mess that he inherited.
Thats why i loaded up on my first 30 000 shares today and will soon be looking for a lot more. They now have the financing to finish Magino which will be a Cash Flow machine starting 9 months from now and will make huge profits when they get up to 300 000 low cost ounces. In a couple years we should have a 400 000 ounce low cost producer whos market cap. today including the new shares is aprox. $300 million while competitors with higher cost mines are trading at 10 times that amount.
Nothing is guaranteed in investing especially in miners but the risk / reward here just looks to good to me to pass up.
Good luck to all.