Hello gemsearcher,
Thanks for your input. You've been a great addition to the information mill.
I kinda like the implications that your first two suggestions bring.
Firstly, an issuer bid would re-assure a nervous market. While I would rather see SUF spending dough on things like CNB JV, developing Camafuca, etc., the share valuation is a type of currency. With a depressed currency, simply announcing a method by which this could be improved would help. An announced normal course issuer bid need not actually be completed. But the understanding that SUF might allocate $5-6 million dollars to support its currency and more importantly, its shareholders, can't be negative.
Secondly, a dividend, even a nominal 10 cent annual payout, would allow certain institutions to own SUF. In all likelihood, these same institutions won't buy SUF until the production lifespan is closer to 10 years. But the implication of a greater possible range of buyers is obviously positive. To take one month's earnings and flip it into a dividend couldn't be seen as negative.
I have a slightly different idea. If the above two ideas would cost somewhere in the neighbourhood of $3-6 million, why not build another 50 tph plant? Fast track the fissures (SUF's excellent team in RSA and Kim Freeman in TO could probably make this happen), increase earnings, cash flow and provide yet another facility for producing/testing more from the 100% Klipspringer property.
Or look for other opportunities to generate short term cash flow.
Regards,
Confluence |
