"Have these guys received too many options too easily in your opinion? Are they crooked?"
No I don't believe they are crooked, they just used the privilege of their position to issue themselves free options to protect themselves against the dilution that other long term and loyal shareholders were just expected to wear.
IMO the management are just puppets of the big merchant banks now. They could easily be remunerated on the basis of their take home salaries as the company has plenty of funds (in fact they raised much more money than they estimated that they needed to build the project in their DFS). WAF shareholder's future EPS shouldn't be further diluted by issuing even more free shares to managment. Just pay them a fair salary. The issue of unnecessary shares at the birth of a company, to anyone, has a profoundly lasting impact into the future on future returns per share. The time intergrated impact of these share issues are wildly disproportionate to the actual size of the shares issued as the company might well be in business for decades, so the impact lasts forever.
My point however which you seemed to miss is that there is a difference between a free option and free options with cashless exercise. I think options with cashless exercise should just simply be band, management of these ASX companies already have enough ways to fleece shareholders.
As I said I continue to hold because of the project itself. It has an after tax NPV (at 5%) of US$405M (A$568 million) and IRR of 49% and I believe that M1 at depth has a lot more to offer than the current DFS NPV allows.
At Dec 31 2018 WAF had 863,400,727 shares on issue, A$66.35 million in cash and no drawn down loan facilities. So a market capitalisation at Dec 31, 2018 of A$241.7 million and an EV of A$175.4 million against a DFS NPV value of A$568 million (at a 5% discount rate) and a gold price of US$1,300/oz (currently the US gold price is also higher than the DFS NPV assumption).
I'm not holding because of managment, I'm holding because there is still value in holding this stock despite the unnecessary share confetti give away which will act to erode away the long term return per share making the long term hold here less attractive. The shares you give away for free at the beginning have very large costs over the life of a company. Let's keep an eye on DCN vs WAF. DCN have kept their shares on issue very low and have taken a 50 cent IPO (in to 2012) to a $2.74 share so far. Both companies IMO have similar production potential, it's just a bit harder for WAF to prove up its LOM because M1 has a much smaller foot print than Westralia. So far DCN's abilty to serve shareholders by containing SOI has been far superior to WAF's abilty and this is reflected in the share price. You say it's all down to the differing sovereign risk, I say it's down to management. DCN managment is just more proven, understand how to preserve shareholder value and I expect that it will always outperform WAF in all respects.Esh
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