Hello Vaughn,
Thanks for the interesting thoughts. Some points I agree with, others I do not. I think that all would agree that Chris Jennings is a top-notch, world class diamond explorationist. I think its fair to say that SUF is very much the net result of all the efforts that Dr. Jennings has put into the company.
The intrinsic value, the blue sky potential, the exploration upside, whatever you call it, will provide the long-term, large move upside that we all saw two years ago, and expect again sometime in the future. This is due to the abilities, the projects, the excellent people all brought to SUF by Dr. Jennings. I am sure there are many other positives that we are unaware of, things like political and corporate connections, etc.
As an exploration firm, no revenues are expected, and companies have to continually "go back to the trough" to raise capital through equity issuance. SUF, and Dr. Jennings as one of the world's foremost diamond explorationists, were excellent at this part of process, having raised about $82 million since inception, including the last financing at $17.35 back a couple years.
As you can imagine, raising this kind of money requires the assistance and support of buyers, brokerage firms and analysts, to name but a few. The rationale used by those on the buying side, or in the advisor role, is that the expenditure of this capital will lead to exploration success and development of profitable mines. This is exactly what the buyers of the $17.35 stock were expecting. And this is what SUF delivered, via Marsfontein and Klipspringer.
However, as will be obvious to all readers, difficulties, delays, whatever, have taken the "glow" off the rosy expectations of those who were involved in the process. The Marsfontein debacle scared away a lot of institutions who had relied on management to deliver as expected. Those analysts/investors who stayed the course were expecting certain levels of cash flow and earnings, according to the guidance provided by management. Thus, when the numbers delivered fail to meet the expectations, those involved in the process feel disappointed and misled. For myriad reasons, the analysts have abandoned SUF.
The many folks who post on this thread represent investors who have a pretty good understanding of the long-term potential of SUF. And the short term positive surprise potential from drilling results, recoveries, etc. This patience is not shared by all. For example, look at today's trading. 5,000 all day until 3:53 and then 12,500, all sold onto the bid. Why the impatience? Why whack the stock late in the day? Isn't good news on the Messina project, the Q3 numbers, the Leopard fissure, etc., expected any day now?
Its seems clear to me that those selling now are either forced to (margin?) or won't wait the few days until the good news flows. In other words, the selling shareholders don't have faith in SUF to deliver the news according to expectations. I hope they're wrong, but obviously they are motivated to sell the stock to continued new lows. This causes measurable damage to all present shareholders.
This is the main reason that new management is required. The investment community (investors, advisors, analysts, etc.) simply don't believe the management of SUF is capapble of delivering developments to meet expectations. Its that simple.
Another way to put it is something one analyst told me: "As the president of a public company, Chris Jennings is a good geologist". That is not to slight the rather obvious talents of Dr. Jennings, but to stress that SUF is best served by utilizing his vast ability on the exploration side, while leaving the administrivia, the hand-holding of investors, analysts, etc. to someone better suited to building the future image of SUF as a producing company with good earnings and cash flow, diversified operations, and the BEST EXPLORATION POTENTIAL of any diamond company.
As a shareholder, I have pleaded with Dr. Jennings for years to leave the annoying accounting, investor relations, corporate governance, administration, etc. to someone else, hell almost anyone else, and get himself back to the grassroots exploration. I truly believe that is best for SUF.
In my opinion, Klipspringer, Marsfontein and Messina should justify SUF at $10 or so. But I own this stock for the move much higher, and I believe this can only be accomplished by getting Dr. Jennings back to what he does best. Who cares what titles they give him? Call him the Chairman, the President, the Grand Poobah, whatever, but get him back on track on the exploration side, and let someone else handle the rest.
As we sit with shares in a company with a market cap of under $60 million, it is clear that something must be done.
If we give Dr. Jennings and SUF credit for the run-up two years ago to the $20 level, what conclusion are we forced to now?
Just my thoughts,
Confluence |
