I agree with the general sentiment on this Message Hub that the disclosure that we’ll be waiting a little while longer for Magpie is far from surprising. Indeed, what did surprise me was how long we inflexibly didn’t deviate from our earlier get-it-done-by-the-end-of-the-year timeline. Undeniably, with all the pieces that need to fit together and with the need we have to synchronize our actions with the sentiments of the market, the delay can do nothing but benefit us.
As usual, Smith can be faulted for not being as open as he should have been. However, at least now we get to draw the conclusions we hadn't had earlier. Surprising or not surprising, I don’t think such a fundamental strategic move as when and how Magpie gets done is anything but tightly connected to the recent PP. After adding to Magpie the somewhat uncertain timing of the upcoming resourse estimates and assay results, the need for the PP right now appears to be less and less perplexing.
Hard as it may be, for the sake of logically appraising the current situation, put aside the cruelty of the market and the insensitivity management has exhibited over the years. Even though I arrived here after the sickening price drops and after the hard feelings about it began, I empathize. To put it mildly, I’ve suffered my share of companies managed contrary to what I knew to be better at the time.
Earlier I wrote the PP was not 100% a bad thing in regards to everything about it. I suggested a 51% bad rating was closer to the truth. Now, in light of the complications of the upcoming Magpie offering and in light of the continuing drilling programs and how the new resources will be presented and exploited, (hard as it may be) consider the possibility the PP may turn out, after all, to have been correct and, even, well timed.
This is my thesis:
1) Our situation is not simple undervaluation. It is a mega undervaluation so overplayed, even multiplying the current share price one hundred times may not be sufficient to fully account for it.
2) Dilution hardly counts in such a case because the company will be taken over long before we get to enjoy anything resembling justice in regards to stock price revaluation.
3) Time is more than money. If we don’t extend ourselves to our full capacity right now, revealing and clarifying what we have, there will be no time to do it later. Our acquirer will steal what we failed to put on display. She will take credit for it, at her leisure, as she digs it up and sells it and pockets the profits we would have had; had we been less worried about dilution percentages and more worried about rapidly shoveling out express resource estimations, full of relevant peer comparisons.
4) Besides causing dilution, the PP put money in our account. Now is not the time to hoard that money or any of our money. The responsible thing to do is spend the money like there’s no tomorrow.
5) Right now, the rapid (and wise) expense of money will buy us better monetization of our resources (when we most need it) than the cleverest or most numerous press releases.
In other words, right now (as never before) is the time to shine. Even if it requires digging like we never dug before, we need to put out ever firmer numbers, destroying the misconceptions of our greatest skeptics who don’t understand the difference between one million tonnes and one billion tonnes. Having that truth sink in should be our focus. Left alone, the market cannot even add up our publically traded assets or our cash balances.
