Various and Sundry
September 10, 2010
In my notes following the most recent PDAC session, I made a prediction that the Perda would be signed by the 20th of March. Recognizing that predictions including reference to timing on this stock have, generally, proven to be foolish, I took a regular beating from the peanut gallery over the next three and a half months for that egregious error. As we learned on July 6th, the Perda had, indeed, been signed on the 18th of March. I offer this not as an ‘I told you so’ claim, but rather as indicative that things are not always as they seem.
My latest misadventure in the prediction department saw me proffering the month of September, marked by the passing of Labour Day, as one of significant forward movement – and news – for the Company. Time will judge me on both counts, to be sure. On the news front, I have no idea whether that judgement will be favourable or not. On forward movement, I’m more than comfortable.
Suffice to say, following on my Labour and Delivery analogy, I think the head is fully engaged, the patient and room are both being prepped, and this baby will come when it’s good and ready. Perhaps what we saw in yesterday’s trading was the first set of contractions.
Of course, these notes are to be taken only as my ramblings, not, as some have characterized, an epiphany of any kind. Here’s what I see:
- West Lombok IUP status, guestimates? I sense that we’re looking here at one final stage of paper shuffling. Minor shuffling, in my view. To those lacking confidence in its ultimate issuance, no shuffles are minor. For me, this has not been a question mark for many months. The only question is how long before the music stops and the shufflers sit down and sign. Let’s leave it at ‘soon’ shall we? After the ‘quiet’ period set in on exploration activity (awaiting the West Lombok IUP), John Proust insisted that all staff be held on SA’s payroll, and seconded to other, more active, explorers in the region. My understanding is that an instruction has recently been issued to start retrieving those staff in anticipation of significant changes in activity levels.
- Cash flow – needs, concerns, sources? In the many conversations I’ve had with John Proust about cash, he’s taken to a heavy sigh, a hand wave, and a dismissal of my concerns. Here’s my strong sense on the issue. First, I recently enjoyed a very nice lunch with Celeste Curran. Engaged to work on contract negotiations with parties interested in SA properties, she “has been very busy, and remains very busy” – no specifics, of course. One or more (I suspect more, but these are, again, only my words, likely based on a hyperactive imagination) SA properties will be advanced using OPM (other people’s money). Second, I believe the proceeds from available options total somewhere in the range of $4.5 million (working off the top of my head, here, so I’ll stand corrected). I believe that John Proust – remember, he’s the one who’s been recently buying at the market (July 12th, 20th, and 22nd, all at .80) holds 2.5 million options at .40 and another 850,000 at .80. His options alone are worth $1.68 million to the treasury. Mike Andrews also holds a mix of options, I think worth in the range of $680,000. Running total for the two of them… $2.36 million. Add in David Stone, Hamish Campbell, and Andrew Rowe and all of a sudden you’ve got a running total of some $3.2 million. That, from just five key players. Let me see now. At $200 per metre, that could be 80 holes in Pelangan/Mencanggah at 200 metres a pop… just for instance, mind you.
- Related to 2.), above, prospects for financing – amount, pricing, timing? If I’m right about OPM (see above, and by the way, did I say that Celeste Curran has been very busy lately?) and I know I’m right about the options, short-term needs to fund operations on SA’s portfolio of properties are covered. Such activities (drilling) would logically be hoped to support some potentially meaningful gains in share price, to a level where dilution attached to any new financing would be minimal.
- Promotion – bringing others into the theatre – who, how, and when? I believe the important conversations have begun. With news, but not before, the trigger will be pulled. No carts before the horse for this one. A good litigator never asks a question without already knowing the answer. John Proust will not tell this story before the book is firmly within his grasp.
- Did I mention that Celeste Curran is busy?
- To the traders among you, this will bear no positive value, in fact, perhaps it will hold a negative value. John Proust insists that he is building a company, not a pump and dump. This is about patience. If you’ve done your homework, and have concluded that the Company has the goods, you’ll be more than willing to exercise patience. If you’ve done your homework, and can read between the lines, there are enough strong hints of significant progress now underway to sustain that patience a while longer. If you haven’t done your homework, or if you don’t step back to look at the fundamentals, the actions of management, and recent developments in both the metals market and Indonesia – nothing will give you peace. We all have to make our own decisions, based on what we know and on our own personal circumstances. I’ve made my own bed, and sleep very well, thank you very much.
- Diversification of property interests. This Company is not a one-trick pony. It’s a portfolio of highly prospective properties. I won’t get into a detailed discussion of individual properties. Those of you who do your own homework already know what’s there. Those who don’t know, don’t care. Set along the Sunda-Banda Magmatic Arc, as a friend mentioned to me just today, you can almost throw a dart and hit gold and/or copper. As astutely stated by my friend, diversification of property interests along this arc significantly increases the odds for success. Not to get too far into specific property discussions, I’m getting more and more intrigued by Pelangan and Mencanggah. As another friend, whose opinion I respect greatly, observed in a conversation yesterday, these could turn out to be among the best epithermal deposits “in the world”. I’ll stop there.
- Oh and just in case I forgot – Celeste Curran is very busy these days.