Hey Flaming, I feel for you. MOY does indeed have lots of potential. When I first started following MOY, I realised that they were doing very well with the drill bit, the big challenge for them is that they are starting from the back of the pack 'short LOM'. Which of course everyone realises. My sentiment is hold, because I think once they do get the plant upgrade plus have U/G operations to increase the overall grade, the companies market cap should be over $200m. The challenge is how are they going to fund it (as you have discussed).
But before I touch on that, I think the current share price is down to two factors, as you mentioned, how is MOY going to fund everything they want, when they are basically treading water (quite literally, the last quarter they started with $27.7m and ended with the same). This quarter is going to hurt (hence the share price), the quarterly clearly explains that cash reserves will get down to less that $16m, before jumping again back towards $24m.
Then you have the exploration, $20m+ is just not sustainable. If they are serious about the plant upgrade and the U/G dev, then.... it needs to be cut to the bone. Just 1 year or small, targeted exploration might save them $15m, which would likely fund the U/G development of Bartons. Or... pay for 1/3 of the plant upgrade. Yet... coming back to the focus on my post, MOY are trying to do everything at once. Explore, develop and ever double develop. Perhaps they fear they are prey for others (I can see some logic for that, surely RMS/SLR could do a straight merger with them and use all their cash to fund something useful, like turning MOY into a 100k producer), or... they really just want to do everything at once. They have over 2 years of reserves at least, without any more drilling... and they could easily add perhaps 1 more year just by drilling the pits after being produced from.
The question is, what does the main shareholder of MOY actually want the company to do (as I assume having 50% of the stock gives them a big say).
I think someone mentioned that they spoke to management and a CR was ruled out. Sorry to be blunt, but... no MD is ever going to openly admit to planning a CR. While I am speaking from hindsight, MOY should have raised $30-40m back in Feb/Mar (others like RMS did, and they already have $50m in cash). Then all of my post would have been answered. Yet here management find themselves with a terrible quarter coming up, lots of plans to expand the company but no cash to do it.
For what its worth, I would probably be willing to take an initial position if the MC goes under $100m. Sure, it probably won't happen and that is fine, but... I need to see a big discount. Good luck with MOY, management seem very open and honest, and that in itself is one of the main reasons I keep watching, their being so upfront about everything is refreshing.
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