Probable meeting outcome…
Surly the management is expecting shareholders to be upset. They will realise that this has not been a good year. By now, they realise that 2013 will be a make or break year. They will also realise that further dilution will result in more disgruntlement and a possible reverse split because the SP is too low as it is. We all know how RP will make an attempt to smooth things over and try to save face. That would be the proper thing to do as long as he means it. We do know that they have done some improper things in the past and may take this opportunity to “finally” benefit both themselves and the shareholders. Their back is against the wall and if they want to continue operations and keep themselves employed they will eventually have no choice. I am sure by now they have figured out that the SP is the “voice” of investors… don’t they already know?
The solution is simple really… COME UP WITH A PLAN TO:
- Do what must be done to at least maintain or definitely increase production while promoting safety.
- Pay down debt gradually with income so that it is manageable. We all understand that total debt cannot be eliminated because of the tax implications.
- Increase efficiencies as to avoid any further dilution. Now that they are producing - perhaps extend lines of credit using production income and equipment as collateral if need be. Further dilution must be avoided at all costs. Make an attempt to keep as much cash as necessary on the books.
- Make a plan to buy back shares that will start sometime next year. Monthly, random, partial or bulk market purchases… doesn’t matter as long as it gets done. This is something they must do to reverse dilution. Sprott and other Major holders will make this clear to them if they have not already.
- Continue with some exploration or possible partnerships – purchases - with neighbours?
- When they have established a good cash flow (could take a little while)…start sharing the wealth with investors, employees (some kind of share purchase program) and finally themselves. That’s what all good managers should do. I was glad to see a reduction in that salary… there are few managers that would have done that.
If they have the wherewithal to do this, success will come to all stakeholders – now let’s see what happens.
We are at the crossroad.
P.S. Wouldn’t it be great if one of our names was on the ballot. These proxies should be more like elections format… you know… the candidates name and what he/she will do for the company… etc.