Your post got me to thinking about what it would take to make this an attractive investment again. Barring some pie-in-the-sky deal where someone with big pockets steps in and just begins to throw piles of money at this thing, the BOD needs to change the story so that this company can raise money from individual investors.
My concern is that a new investor (or even an existing investor, who may be convinced to double down) may be put off when they look closer at weaknesses in MSX's strategy an leadership.
Three points which I think MSX needs to address:
1) (Stolen entirely from the Hopeful post I'm responding to) MSX needs to drop the risky distractions. Fitzgerald was a very expensive series of losses. Close the book on it, and end the uncertainty of further financial drain. The last thing that an investor wants to see, IMO, is MSX take another run at this with Steve Davis. Imaging trying to sell a new investor on his investment while some nebulous money-laundering, price-fixing, mind-control lawsuit against the State of Utah, the Church of LDS, Barrick and a handful of past US Presidents/Canadian Prime Ministers is waiting in the wings. Likewise with Alaska, Montana and Nevada. Chile is the only play that matters.
2) The strategy in Chile needs to be something more than "keep throwing sticks at Barrick until something happens". It's costly, the outcome in uncertain, and it has no end in sight. Simple: JL has title to something. Prove the viability of a mine on that site, regardless of its relationship to the existing Pascua Lama project, and you have something to hang your valuation on.
3) Change leadership. I've been drumming this one for a while, and there's no point going back over my reasons. Actually, I'd like to acknowledge a valid objection to my opinion. Tibby has quite rightly pointed out that JL might not go along with a change of leadership, and since he has us bent over a barrel, we have to do what he says.
You're right, Tibby. If this was approached as a mutiny or a coup, I think JL might take his marbles and walk away. But it doesn't need to go down that way, IMO.
Mr. Johnson is a major shareholder, and he stands to gain in a serious way if MSX succeeds. If what I've said is true, and attracting serious money is impossible with these big questions of strategy and leadership, might in be in his own best interest to step aside in an orderly transition, and keep JL on board?
I wonder if Mr. Johnson has it in him to put investors first. He could explain to JL that raising money is nearly impossible with this much uncertainty. JL doesn't want to run out of money. JL doesn't want to risk what credibility and profile he's gained through this partnership. Mr. Johnson could explain what a stabilizing effect a qualified leader with no baggage could bring to the situation. He could assure JL that he'll stick around on the board to ease the transition, and make sure that past commitments are met.
So far, this has been posed as an all-or-nothing with-me-or-against-me thing. This may have worked pretty well in a communist-era military dictatorship, but it doesn't play very well when you have your hand out for money, as recent attempts to raise capital have proven.
Worth a try?
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