The notes payback is the issue, as they currently don't have enough funds to pay it back when due, unless they start selling things and/or another capital raising of some sort. The second problem is equity dilution, which is negating any upside from any production efficiencies and gold price appreciation.
The next 12 months is critical for SBM, so unless & until a satisfactory outcome for the notes is achieved in the meantime, and if the general market comes under pressure also, then 4.5% in the bank might give a better return. For me it's outside of my risk/return channel.
HUH?Possibly a useful stock to spice up a heavier low risk portfolio.
So more dilution to come.• Forecast cash for June 2010 not sufficient to cover potential full redemption of the convertible notes (currently A$77.1m) on 4 June 2010
• June 2010 cash position is challenging and made more difficult by
– Inability to arrange normal working capital and environmental bond guarantee facilities in the current economic climate
– Potential for WA Government to lift moratorium on environmental bond rate increases from Dec 09
– Gold price volatility risk
18 May 2009
Following shareholder approval at an Extraordinary General Meeting held on 5 May 2009, the Company has issued Mr Tim Lehany, Managing Director & CEO with 1,508,099 employee options.
Surely this is not anything that Endeavor ever was?A wild and woolly stock is SBM the former Endeavour Resources. Always a survivor despite extreme problems at times and has always come good in the end for patient investors.
A great ride in the bucking bronco stile, just hold on.
Boomed in the 1970's and right up to the 1987 crash. Well published for its mid 1990's rocket to around $3.00 in the Atkins boom days and its slide to 2 cents in the early 1990's.
Never give up on SBM, that's my view anyway, my blog1 shows the reason why it remains my best friend.
Yep, for better, or worse. Huge risk if POG doesn't go verticle like we expect. Lets just imagine for a moment that POG corrects back down to the $600s and the AUD strengthens. SBM cash costs remain about $900-1000, AND they limit production. Debts, no cash flow, market in depression, can't raise money ....Like I said, a very highly leveraged play on the price of gold.
The notes payback is the issue, as they currently don't have enough funds to pay it back when due, unless they start selling things and/or another capital raising of some sort. The second problem is equity dilution, which is negating any upside from any production efficiencies and gold price appreciation.
Yep, for better, or worse. Huge risk if POG doesn't go verticle like we expect. Lets just imagine for a moment that POG corrects back down to the $600s and the AUD strengthens. SBM cash costs remain about $900-1000, AND they limit production. Debts, no cash flow, market in depression, can't raise money ....
Or, everything is rosey!
These things do go wrong at times. One of my coal stocks that went into pig iron production forecast 2.5 million tonnes per annum by 2004. Result in 2004 was zero production.LOL
And how about this slide from a presentation last year.
1m oz au by 2010?
LMAO
Have they even got a mill that can do that?
Well, this isn't just 'go wrong' imo, but spectacularly poor communication, management, and real knowledge of your people and resources. During a time when POG is at all time highs. Maybe Ed was the issue and hence the sudden change in CEO. Keeping him on as a 'consultant' because he knows the projects so well is a bit of a joke.These things do go wrong at times. One of my coal stocks that went into pig iron production forecast 2.5 million tonnes per annum by 2004. Result in 2004 was zero production.
They forecast $78 million profit in 2006, when we got there it was less than $30 million.
This year profits are around $400 million.
Patience is a virtue, and just like SBM a gutsy hold.
Well, this isn't just 'go wrong' imo, but spectacularly poor communication, management, and real knowledge of your people and resources. During a time when POG is at all time highs. Maybe Ed was the issue and hence the sudden change in CEO. Keeping him on as a 'consultant' because he knows the projects so well is a bit of a joke.
I would actually be interested to know the details of the processing facility capacity. On a range of 5-10 g/t to produce 1m oz au pa would require a 5-10m tpa mill. If Chicken was still about he would know of course. He believed everything Ed said too. lol
High risk stock. Only invest what you can afford to lose.What a classic example of hope and fundie "value" getting smashed on the sea of reality,
Price.
Its been a pig to holders long before any of the outsiders started to see the fundamental flaws in this mangey dog.
But noirua, this is not that company.I bought my first shares in the 1970's,
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