FML 2.70% 18.0¢ focus minerals ltd

Hi all, Haven't posted for a while, but felt the need to share...

  1. 113 Posts.
    lightbulb Created with Sketch. 34
    Hi all,

    Haven't posted for a while, but felt the need to share some thoughts.

    Yes, it has been quiet in this space for a while now. I guess that's what happens in difficult times for gold miners. FML's mistake was to 'aggressively expand in a rising gold market', and this accounted for the high cash cost incurred during that time. Like most of us, they assumed gold's price would consolidate, if not rise. How wrong we all were.


    I remember the criticism FML received when they took their cap to raise money rather than drive growth from group production. In hindsight, Focus was probably lucky to raise capital from the Chinese a few years ago as they are now in a strong cash position with relatively few costs to evaporate funds. They have been sitting tight, completing low cost jobs that will hopefully place them in a good position when (not if) the gold price recovers.

    So what is the current situation? Focus appears to be adding to its resource base, poking a few holes here and there to plan its future. Drill holes in Brilliant, Bonnievale and Lancefield appear to have enough to work with. Brilliant has recorded holes with 13 and 25 g/t with reasonable width, but at depth. Bonnievale has shallower depths, but with less grade and width. Lancefield has little to be excited about with the exception of one drill hole which recorded low depth and 60g/t. Future drilling could be interesting with this one.

    Like other projects, Treasure Island hit the wall. The one drill hole completed in the eastern section of their acreage showed nothing to be excited about, but the geology and aircore drill results suggest that this needs further exploration. It's a long way off though. With the current price of gold, it is simply not financially prudent to focus on further development of the project at this time. It would erode their capital, placing FML in a poor capital position to maximise their asset base when the gold price shoots for the moon in the second half of the year (according to Bo Polny! ha ha).

    And that's the elephant in the room for FML. A price above $2000 gold. Focus is in a good position if this was to occur. Companies with significant reserves and resources are the companies that will do best with a high gold price rather than those with low cost mines. ie a larger asset base will be realised very quickly and very profitably. They also have the security of operating in a region that is safe and secure from disasters such as wide ranging currency fluctuations, war and natural disasters (eg SBM). So while we and FML sit tight waiting for this to happen, I might have to accumulate another parcel of shares in a gold miner with the above criteria and no debt.

    Research is the enemy of poor decisions.
    Stockist
 
watchlist Created with Sketch. Add FML (ASX) to my watchlist
(20min delay)
Last
18.0¢
Change
-0.005(2.70%)
Mkt cap ! $51.58M
Open High Low Value Volume
18.5¢ 18.5¢ 18.0¢ $8.256K 45.41K

Buyers (Bids)

No. Vol. Price($)
1 5408 18.0¢
 

Sellers (Offers)

Price($) Vol. No.
19.0¢ 85181 3
View Market Depth
Last trade - 14.07pm 29/03/2024 (20 minute delay) ?
Last
18.5¢
  Change
-0.005 ( 0.00 %)
Open High Low Volume
18.5¢ 18.5¢ 18.5¢ 5135
Last updated 11.59am 29/03/2024 ?
FML (ASX) Chart
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.