PEK 2.50% 19.5¢ peak rare earths limited

I think there's a bit of a chicken and egg discussion happening...

  1. sjl
    1,194 Posts.
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    I think there's a bit of a chicken and egg discussion happening here. I can see where you're coming from, but to express it in a form that suggests that management's sole responsibility is to increase the share price (which is how it comes across to me) is not only inaccurate, but also dangerous. I might be misreading your intent, and I have no qualms about apologising if so; that's simply the way it reads to me.
    I do agree with you there. I might quibble about the 50% of the company - strictly speaking, it was around 20% of Peak itself, and sufficient of the (previously wholly owned) subsidiary that holds the rights to the prospective mine to effectively give them 50% of the African assets, rather than being 50% of the company itself - but that's really just semantics, rather than the substance of the argument. It certainly does put a significant dampener on all the foreshadowed future development (including the niobium/tantalum resource north of Ngualla, and any of the remaining gold assets that might still be held by the company - can't remember if they've offloaded those or not), and I think that's why the share price is still languishing this way.

    That said, I would argue that that little incident made it pretty clear to those who have been following the company that the options would be unlikely to make the target.

    Fundamentally, I think we're just arguing cause and effect, rather than the fundamental issue: that there has been severe issues with the way management has handled fund raising (in my mind, that's the one glaring problem with the company, and has been since I got in).
    No bet on that from me. I don't take blatantly obvious sucker bets.
    On the bright side, the 50% of the company does get us funding through to a decision to mine, and my feeling is that by that stage, we'll be in a much better position to fund through debt, rather than raising capital. Yes, that brings its own set of risks, but if we reach the point where that's a serious option, it would seem to me to be a no brainer - even allowing for interest costs, it'd be better for the long term shareholders than the alternative. Short term pain, yes, but much greater long term gain. I believe (please note the caveats and caution in my words) that we're now past the point where management could realistically argue a need for raising more capital, and that gives me hope that we're now in a "wait and see" pattern, rather than being particularly worried about downside.

    All that said, I'm not in a hurry to increase my holdings; I'm not comfortable risking more than I already have (and I'm pretty seriously in the hole here, unfortunately; the bounce I expect to see once there's solid progress and news is most likely to bring me to break even, rather than a significant profit, I fear.)

    Maybe one day you and I will raise a glass to each other at the one dollar party. Long, long way away, though, alas (if that day ever comes).
 
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