Re:<"Check out the Balance sheet again and read the filing, as I feel you did not realized they have already taken reserve for the land loss at the end of 12-31-2007 into the account.">
I don't think you're correct regarding a reserve for a loss on the land. Equity has been dropping consistently about $1M per quarter, consistent with earnings. The estimated loss on the land was announced to be between $3M and $4M. Can you point out the reserve? There's no place in recent history where equity dropped by $3M to $4M. Remove that and an additional $2M for the last two quarters (to the end of June) and the current snapshot probably shows equity around $5M.
To your point about the mining, I would also guess the mines/claims are worth a lot more than when they were purchased. if gold is up 50%, the value of the operations should go up some multiple of that--an increase in the price of gold goes straight to the bottom line with no increase in expenses. Even a mining company with -10% net margins would find net margins swell to nearly 40% with a 50% increase in the price of gold. That's the difference between night and day.
For my point, the SG&A is very high for a company run by one man. I suspect the stock price accounts for this situation fairly well. I would find it hard to believe any shareholder (other than the recipient of the SG&A) would be happy with the SG&A based on the assets involved. Obviously there are conflicts of interest here and Mr. Jarratt isn't doing what's best for shareholders. The company is a year and a half away from having equity of zero.
Contrast that to right after JB Oxford's accounts were sold to Ameritrade, equity was $24M or about $70 per share in good, solid equity. I'm sure every single shareholder, other than Mr. Jarratt and his 60% ownership, would have loved to have that cash distributed. That didn't happen since he does own the majority and since then the coffers have slowly been drained. Shareholders' interests appears to be a low priority for Mr. Jarratt.
For the operations, it looks like Mr. Jarratt made a good bet with the gold mining operations. Undoubtedly that added some value to the company. Again, though, it comes down to Mr. Jarratt's intentions. He could hit the mother lode with a chunk of gold that would dwarf Fort Knox but if his intention is to wean other shareholders from their stake, the stock still won't be worth very much.
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