I actually am not as critical of the management as some investors. I can also understand why long term investors would be highly pissed off with SLR - so please don't think that I'm trying raise the ire of investors that are licking their wounds ( I'm sympathetic because my portfolio has been decimated too). I rather blame circumstance more than management. Here are some points to my reasoning.
Back in 2011 most pundits (even main stream analysts) were making predictions that gold would hit somewhere between 2-3K USD. Newcrest was at about $40 and euphoria was taking a grip on the sector. I believe the decisions that came back to bite SLR on the arse were made during Moët et Chandon sipping days where expansion was the thinking (500K ounces/year).
The cap raising (from memory when shares were about 90c) actually was a lifesaving move by SLR in retrospect (my apologies to those that participated). It served to retire their debt and with the benefit of hindsight, was well timed. Imagine the further dilution that would have been caused if they had furthermore hesitated with the CR.
The recent hedging program has been a big win for management so far. Being a gold permabull, I only like very minimal hedging, especially at lowish prices. However, these have been great deals to break in today's bear market phase. I actually can't even understand why the counterparty in the hedge deal offered such higher prices than spot at the time - temporary insanity maybe.
No doubt that the psychology of the company's abysmal share price and the need to sea change it's whole direction could be a good recipe for disharmony or whatever else you want to call it. This is where I'm guessing that some of the fellas might have decided to hang their boots up. The extreme silence in the form of announcements and presentations lately could be seen as further supporting circumstantial evidence for this scenario. Anyway, this is not meant so much as gossipy speculation, rather, that this sort of thing happens when participants go from dealing in a euphoric phase en route to a capitulation or depression phase.
I think that SLR will survive through this ordeal and could even thrive if management don't stay permanently cautious or defensive. That'll be their biggest challenge - to change tack again and become more aggressive when required.
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Price($) | Vol. | No. |
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