MIL Resources (MGK.ASX) might be looking at a time of 1.1c before they recover. Despite their very attractive prospects, the company is not taking a path best for shareholders, but rather spreading their cash resources very thinly. This is of course a problem for shareholders between now and when they ultimately reach bottom - I'd say at 1.1c. The problem is not the quality of the projects but timing and strategy:
1. The directors are not acting in the best interests of short range shareholders - but those looking for long term opportunities. What is the difference? Some are directors accumulating unpaid salary which I dare say will be paid out from debased shares with options at an opportune time.
2. There projects are long term, i.e. Titanomagnetite resources to be developed in a decade, and gold resources (very attractive) requiring a lot of drilling. Easy to get excited; but what happens after the great requires - another drilling program requiring money.
In the short term, I believe this stock is too long term. It has over $4mil in cash, which will not go very far in PNG, given the dispersion of projects they are testing. Thereafter there is upside with:
1. Exploration results from drilling
2. Farming in by JV partners who will have 3D results to justify farm-in and high buy-in provisions
3. A stronger gold price
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