About the funding levels...
It seems to me that Jaba has about 20 great targets but
not the overhead to begin mass exploration. I believe that
they are trying to (1) find one or two successful projects to get
them going and create revenue from there and (2) set up a JV so the
partner can pay for it since Jaba doesn't seem high on fundage.
What exactly are their funding levels? I don't have my DD packet with
me right now and so I don't know for sure. In fact, I can't remember
seeing a balance sheet in the packet they sent to me. I guess that before
I criticize their overhead I should know exactly how much they have.
The concerns I have are due in large part to Bre-X. If Bre-X scares away
institutional holders for a while Jaba might not move near-term. This could
be a bad thing for the whole resource sector in general. So, of some of the
stocks I hold right now, one has an exploration budget of 10mil and
another 8.1mil and that is enought to keep both of them going for
3-4 years even in the face of a bear market. But what would Jaba do?
One thing I like about Jaba is actually a shortcoming from the business
standpoint. They don't issue options like crazy for themselves, they hold
85% of the stock, and they don't issue warrants and make private placements
to raise money. I like that because I know that as major shareholders they
want to keep from diluting their shares. If they don't want to dilute their
shares they won't dilute our shares and in the long run we will all make
more money. I see this as a business-side-of-the-equation shortcoming
because that's how most companies raise money for exploration...warrants
and private placements. JBA doesn't do this and must rely on a JV to
get funding. But, as shareholders we will be investing alongside management
and they will have the best interests of all shareholders in mind (IMO
mostly because people in general are somewhat greedy and they hold a lot
of shares). But let me also state that I am not a current shareholder,
I sold near the beginning of the great Bre-X drop and am still flat.
So in other words my concerns are how will Jaba get money? If Bre-X has
squaw-dookey then will large institutions and mutual funds be willing to
invest in speculative issues for a while? How can JBA explore without funds?
Why are they taking so long/having trouble getting a JV together? I could ask
IR about this, but who knows what they would tell me and how do I know
I could believe what they said?
Another thing is that the management's shares are restricted from trading for
a while. So even if they struck it rich they couldn't capitalize on the
discovery from their own personal monetary standpoint. Does this mean
they will take their own sweet time with exploration until a year from now?
I intend to invest in Jaba again in the future if their chart begins to
show some signs of life from the standpoint of technical analysis. I guess
I'm greedy too and am holding plays that I think will appreciate fast in
the short-term, giving me more to invest in sound geologists (like Jaba's)
when the time comes. In general, I like Jaba because of the property
they've acquired, expertise, and shareholder value (it's rare for a junior
to truly be concerned with shareholder value and IMO Jaba IS in the long-term).
I dislike them because of differing tales of information, not keeping on
schedule with announcements, their lack of large amounts of funding to
continue with exploration short-term, and [I don't mean to be insulting...
just an opinion] their apparent lack of business savvy.
That was really long and very opinionated. I think it pretty much sums
up what I think about all of this right now.
M. |
