Excelent post by crdy :
Nothing would do more for the SP than some firm guidance on EPS. As you say, they have guided on production and direct costs. I believe the outstanding warrants would raise nearly 60 million dollars. There are some that expire in mid-October at $1.54 and a bunch more that can be called with the thirty days above $2.00 trading. My guess is that they will promote this summer to get the SP at the call level and that will cause the people with the expiring warrants to also exercise them with a SP above $2.00 and they will call the rest.
The big question is how much do they want to spend and expense in the areas where they have substantial control and can heavily impact the Income statements. (i.e. such as exploration and how much they intend to capitalize from the millions already expended.) ODN production is still a long time line away; they will not even make the decision whether to process there or haul over a new 22 KLM road, that they would have to build, for at least another year.. There is plenty of gold nearby for the Molejon plant either through the expanded pit with the high grade 3.01 g/t ore below the aggregate or the two expansion areas of the pit with its new configuration. Also Santa Lucia is right next door, has a lot of gold and is much easier to mine and haul than ODN.
With the new ball mill coming on line soon, the large stockpiles of both high grade and low grade ore already mined, they can greatly influence the quarterly EPS this FY. The only real question is what EPS do they want to achieve. With the start up now essentially complete and with a huge excess mining capacity, they can pretty well control the bottom line results.
If they would guide toward a
.35-
.45 EPS FY 2012 with gold from $1,300.00-$1,500.00 sale price, the retail market would probably respond favorably. My guess is that the promotion and web cast is probably more about calling and exercising warrants than any pressure from either large shareholders, who are in it for the long haul, or complaining little retail investors, since the company does not lose or profit from short term share price movements with no financing requirements on the table. It takes a lot of mining to put 60 million dollars in the treasury...much easier to promote for a few months even though that is against the corporate culture.
