Fiore Gold Ltd. FIOGF

Advice For Management : Initiate Share Buyback Program

[blackgold14]

As I oulined in a previous post when the stock was trading higher, Fiore is clearly a takeover candidate.  The market's valuation of the company was completely riduculous then and it's even more ridiculous now.  It's time to use a very small portion of the tens of millions of dollars of cash flow profit that the company is generating annually to buy back a significant portion of the company's shares on the open market for cancellation. This action would create shareholder value making the remaining stock of the company more valuable on a per share basis.  Announcing a 5-10% normal course issuer bid would send a message to the market and even minor buying under the bid would create upward pressure on the stock price and also serve to create more stability.  The bonehead move by one of the insiders to sell some shares when the stock was higher a few weeks back was selfish and stupid - it is largely responsible for the stock falling from the $1.40 - $1.60 range to the current $1.15 - $1.25 range.  When one or more insiders think it's a good idea to sell a few shares, it sends the wrong message to the market.  In the future, management and insiders should act in a united fashion - if anyone seriously needs money, then appropriate arrangements should be made to assist such an individual i.e. a loan or pre-arranged swap of stock on the market.  My recommendation may become a moot point in the near future if a sophisticated investor or organization with serious coin makes an offer for the company.  Management has stated repeatedly over the last two years that it is looking at M & A activity to add to production or total resources - well for it to be done on an optimal basis, you need to do it when the share price is in an uptrend or stable, not when it's just been hammered.  A share buyback program can become one element of a strategy to elevate the share price of the company in 2021.  Another would be a spinoff of Golden Eagle NOW, not waiting until you have a JV deal with Hecla that may take years to accomplish given just how slow they are in making decisions.

[lewdogg]

For a company at this stage where they invest almost all their cashflow back into the company for growth, I'm not sure that'll ever happen. Shareholder value is a distant priority to delivering on their future growth plans. I've literally been adding every day so I'm not too upset about the prices staying here. Either way, the PPS should be MUCH higher, IMO.

[lewdogg]

All good points. There seems to be a seller or two that keeps unloading shares. Either that, or shares are being soaked up by some big buyers for a move up. Something is happening right now and I'm taking advantage of these prices because I think it's going to be positive.

[lewdogg]

I emailed the company to ask what the hell is going on so I'll report back if I hear anything.