star mining, page-4

  1. 908 Posts.
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    There was never any mention of price when the original deal regarding star was done. I think the figure you are talking about is the rate at which the convertable note was converted at which was 4.5c. The original deal with Star was that the vendors would take 50% of the deal in script and the rest in cash. This has been improved with the vendors taking 80% of the deal and about $6.9 million in cash. The oroginal deal had them taking about $17 million in cash and the company then had to raise the cash to improve productivity.

    What I don't think the market has caught onto yet is that following the reconstruction there will only be about 30 million shares tradeable and there are some big parcels which are tied up by strong supporters of the company. 105 million shares will be escrowed for about 18 months and 30 months. There is also talk about the third mine going in. Now Profits have to hit certain targets for the $4.8 million bonuses to be paid.

    Given that the mines are already profitable we should see some production figures towards the end of this financial year. There is also considerable blue sky with the new ground on Star which will be explored in the coming year. There is the potential to increase reserves significantly.

    This stock has been hammered over the last 18 months but realistically it should not be where it is. Once people start looking at the deal we should see a rerating of the stock and an increase in the share price. I personally believe that the price will rise quite quickly after the consolidation and some of the figures are released. Opportunity now is to buy the stock at low levels which I have been doing.

    Good luck and happy trading.
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