So yet again a deadline has come and gone, another case of over promise and under delivered. So what to make of LNY ? We have had some news, not quite the news we were hoping for but news nonetheless. Here’s my fact free, totally unsubstantiated musings on recent events.
First off it was pointed out page 4 of the quarterly makes the wildly optimistic statement that they still intend in starting mining this year. This is in the same quarterly where they confirm that they have not reached an agreement with the traditional owners.. So prior to the 1st of Nov no agreement has been made, best case they signed on the dotted line that day and submitted the finalised agreement that day. The case has been made it will be expedited because of the simplicity of the agreement, no doubt all of us pray that it is so, maybe they have a crack squad of DNRM bureaucrats on standby, I wont be holding my breath for a grant of mining lease this year when less than two months of 2017 remain.
LNY did infom us of their intention to buy the other half of the Ashford coking coal project for the princely sum of $370,000. That to me seems to be an absolute bargain and may leads us to a bold inference. My guess is that the JV partners had an option to sell their stake but at cost to the other partner. I haven’t been through expenditures on Ashford so I’m almost certainly wrong but the fact remains that we are buying New Hopes share for what must be a rounding error for a company like New Hope.
I think this may point to a pattern of behaviour of management that we are all by now familiar with. They posses extreme patience, the type of patience that enables them to sit on a coal tenement for ten years paying their obligations but never considering selling. The type of patience that probably had their JV partner drinking heavily and muttering to themselves about how long LNY takes to do anything. This patience got us half of Ashford for $370,000 which is almost entirely paid for by a placement at .00333 which represents dilution of 3%. Quite an achievement I think.
I bet the landholder that held out for a better deal thought that they had LNY by the balls, an easy mark to get more money out of. Little did they know that management were willing to go all the way and focus on other things for two years just to get the best deal. They ended up settling before court no doubt bored witless and regretting getting older by two years and getting very little back to show for it. The traditional owners may just be finding out how patient LNY are willing to be, it seems likely that management are no ones fool and wont be out manuevered by anyone.
The NZ prospects are still there and interested parties may be in talks to enter into a JV. With the number of new gold discoveries worldwide dwindling I’m convinced that another JV will be entered into. One thing is a certainty, LNY will be in no rush to enter into an agreement ! You can bet that shareholders interests will always come first, how can we be so sure ? Because management are the biggest shareholders, they are already wealthy, they will be rushed by nobody. Therefore it may be the case that only those who posses the same ice age level patience will ride the inevitable wave of success.
So my takeaway from the whole saga is this, LNY management are very clever. They are putting together three assets with incredible potential, very carefully, very cheaply and very professionally. I for one am even more excited to be part of the company, I just hope I live long enough to see it all come together and don’t die early of boredom !!!
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