Why/What Now7 Feb 2021 22:53
I don’t buy for one second that Alpala is not economical. That’s asking us to believe that BHP, NCM, FN and the Chinese do not do their homework. That I find beyond ridiculous.
Both strategic and tactical mistakes were clearly made by NM and his acolytes over the last 18 months. I believe almost all of these can be attributed either directly or indirectly to one thing - NM allowed the relationship with CGP to become not only toxic, but also personal. A potential headache became an obsession and unnecessarily so. The new management intake must have found it absolutely bewildering that there had been little or no priority placed on Tandayama or Blanca, especially the former, given its implications for the PFS.
Ultimately this cost NM his job and the company time, money and credibility. The most recent events however, although infuriating, should not be laid at the door of the new management, indeed just the opposite. I doubt very much they have been motivated to act at the behest of BHP or NCM in order to implement some Machiavellian type conspiracy. Indeed their actions might well prove very rewarding to most shareholders in the medium to long term. If anything I now find the threat of a low ball offer somewhat diminished. Yes the share price is considerably weaker but at the same time both CGP and NM would now back the board against any low ball hostile move. With NM removed BHP and NCM are once more rivals and not allies. At the same time a delayed PFS will make it difficult for any potential hostile bidder to secure their board’s approval for anything but the most derisory of offers. Then there is the risk of simply igniting a bidding war with an ill-timed low offer.
So what now? Pushing emotions aside, not to mention big personalities, we crack on with an exciting drilling program and producing a PFS neither of which is now hamstrung by having to wage an unnecessary war against our cascabel partners. Yes there is the question of how we keep the lights on and the multitude of drills turning as we move into Q3. We require impressive assay results across the portfolio over the next few months to steadily push the share price back up allowing any future cash raise to be more palatable. We have however bought some time to achieve this (personally if they are willing I would opt for the Chinese as BHP/NCM have already been allowed too heftier a %). Once we deliver both excellent assay results and an impressive PFS later this year we can then all go back to arguing (sorry discussing) offers and/or production. Hussaarrhhh!
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