Certainly a reasonable answer , but my response :
1. This is a public company that is supposed to report material events, and they are the ones forecasting the September/October start date, revenues and the gross profit percentage- but without other key pieces for investors to judge the forecast. If they are worried about unforseen events, certainly normal and especially with a CFO without experience in minings sector, then why give such an optimistic forecast ?
2. I agree there are many variables and reading their 10k under the boilerplate they do state many risk factors. However the 10k also has a section on forecasting working capital needs, and they do except related to getting mill back in operation.
3. I quite agee a conservative approach should build credibility and support the stock long term.That actually is my point, by being conservative, outlining the key variables and being conservative and meeting projections would do a lot to build confidence in the company.
I have pretty much finished my iitial due diligence. I am trying to understand how a company with $5,000 or so at end of November, no funds raised for 3 months, forecasting a start date in several months, and forecasting revenue and gross profits, little information on capex and working capital required, any sort of detail on $9 million in orders, and very little information in accordance with SEC Guide 7 or standard information on their mining properties, can expect investors to assign a degree of probability to the Sept/Oct start date.
The issue of holding things close to their vest or being careful about forward looking statements doesnt hold water IMO - they specifically give (a) forecast start date (b) forecast revenue (c) forecast gross profit.
I am not saying cant be done, they did bring in $400,000 last year, they have progressed with their permitting process, and maybe lack of cash meant that the permitting process wasnt handled as best it could have, and most junior mining companies have had financing problems. And so what if they get to 200 million or more and have to do another reverse,it is a penny stock and these things happen, wouldnt surprize me in the least.
So I guess my question remains, what gives stockholders confidence that company is on track to meet their own projections, and that company can afford even to stay public without some cash infusion ? Besides saying a strategy of keeping things close to the vest, what give us confidence that one should put larger amounts into this stock ?
IF CFO made a mistake in forecasting a Sept/Oct start date,then bite the bullet, put out a corporate update with best spin possible.Just my opinion of course, because it seems all sorts of people believe they are going into profitable producton Sept/oct, I am just trying understand why people believe that.
AI
