Thinking behind the decision...
I have a simple answer to the question about the decision. SURE MONEY.
You have a very good three year contract with FQM in hand. One that will generate profits representing 60% of your projected cash flow to the bottom line based on last year's numbers. Your production costs can remain very, very low. You can gain access to better ore under the aggregate. You can ensure survival and future profitability. You can maintain your relationship with a company that already gave you a contract twice as large as your total market cap and that sits in the middle of your concession in the jungle, while having an investment there 86 times larger than you are. This is a company that is 375 times larger than you are overall in the wider world operations. This is not a big elephant in the room...it is a whole herd!!!
Measure that against the fickle price of gold. The need to meet obligations for development in Spain and Portugal that have time lines for performance. The future access to your own known deposits via FQM 's road structure. The need to sell copper ore in Spain to Las Cruces owned by FQM. FQM's commitment to Panama to help your development.
I have no confirmation that I can share about the 'big deal' just around the corner. However, just on the merits of what I do know from published facts, the company made the right decision. Who cares if we only produced 12,000 ounces for a quarter? You will find in the MD&A that beginning with Q2 we have normalized operations balancing FQM's needs and our own production schedule.
We may have had another bad production quarter in Q1 and maybe only produced 8,000 ounces, for all I know. But that was the end of it. We are now running normally once again. We probably did a lot of routine annual maintenance while we were down, and the next two quarters should be very good. Then add the revenue from PDI and the EBITDA contributions; FY 2014 will be excellent. These things we can tell from what we know. Now if the rumor on the street is right and there is a big JV on the way that is just more gravy. If it is wrong we still will see a lot of solid income from FQM all the way to 2016.
So again...the decision was for MONEY, STABILITY, AND DIVERSIFICATION. Can't think of a better reason.
Those who don't like the way the company is run can come to the AGM, identify themselves and make their case. We all suspect those who complain the loudest probably have little or no investment at all. you can tell by the total lack of depth in their posts. Now don't cry that no one ever told you Q1 might only be 8,000 ounces. Thanks for keeping the buying window open and the everyday prices so low...even better than Walmart!!
As suggested by the moderator, there is no point in responding to specific comments and posts on this board. All the value is in the I-Box.
