There seems to have been no progress on the M1 drilling front since the 26/11/2018 deep hole announcement despite that November announcement stating
"Drilling ongoing with two rigs on site infilling and extending high-grade gold mineralisation"
The status of the planned up-dip hole and wedge holes on long section SE0359 remains the same as in the November announcement, ie designated as planned drilling. This would indicate that the deep directional diamond drill rig was demobilised after the deep hole was completed or the company doesn't care about undating it's diagrams or updating shareholders on the actual progress of the deep drilling at M1. I'd suggest the former explanation is more likely.
As I said in a previous post our only real defence against a TO is to add value to the project by increasing reserves/resources and/or improving the project economics as reflected in an updated FS NPV (quickly).
The only postive forward looking statement that I can see from the quarterly as to the plan for adding to the project value (apart from any potential value that might be added from the updated the feasibilty) is the reference to
"Exploration near surface targets targets in trucking distance to Sanbrado"
In terms of adding value however this is just a pie in the sky statement until new minerslisation can be found.
One needs to wonder what the reason for the lack of progress on the M1 drilling, since the November announcement, has been. The communication of the compamy seems to have dropped right off and this quarterly provides minimal details, not a sign of a company trying to promote itself to interested shareholders.
I presume that with the deteriorating security environment WAF's independent contractors will also have been reviewing their own security arrangements and protocols, together with their contracts with WAF in respect of the demarcation of security responsibilities. I wonder if the "apparent" cessation in the M1 drilling arises out of issues of this sort. That is the problem with poor shareholder communications, it tends to lead to speculation and the speculation itself tends to gravitate to the worst case scenarios. I don't think WAF managment can afford to alienate more shareholders if it cares about its share price and delivering value to share holders, as is their corporate mandate.
As far as current value goes, based on the current numbers as at end of Dec 2018. The company has
863,524,727 ordinary shares on issue (before any shares that might be placed pursuant to the SPP which closes in 3 days).
That gives a market capitalisation at 21.5 cents of A$185.6 million and an EV of $119.2 million once the end of quarter A$66.4 million cash at bank is factored in.
The company does not appear to have drawn down any of the debt as at the end of Dec 2018.
Given the last FS study (from June 2018) had a post tax NPV for the project of A$540 million (with a US$1,300/oz gold price and a discount rate of 5%) the company still remains undervalued IMO from a value perspective. From a market perspective however it has turned into a bit of a basket case IMO.
(20min delay)
