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CAP

2.27%

4.3¢ carpentaria resources ltd

First stage marketing activities provide very positive market...

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588 Posts.

31/07/15

13:58

Post #: 15729398
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Originally posted by BusterEMC ↑

Re-post.

Business Development? Does anyone know what this means? What business has been developed with the $692,000 of shareholder funds spent on "business development"? When will this business, whatever it may be, generate a return for shareholders?

For the financial year ended 30 June 2014 the company spent $2.857mn dollars on administration. With $2.192mn spent on exploration. So for each dollar spent in the ground advancing the company’s assets, the Board was spending $1.30 on non exploration activities.

In the financial year just concluded, the company spent $2.361mn on administration and just $1.267mn on exploration. For each dollar spent in the ground, now the Board is spending $1.86 on non exploration activities.

If we run the same ruler over the similar Helix Resources as an example - which has more active tenements (including a number in Chile), and more than double the market cap of CAP - one finds they spent $1.118mn on exploration and $0.603mn on administration in the financial year just concluded. Or, to compare apples with apples, 54c was spent on non-exploration for every dollar spent on exploration.

Why is this Board and Management incapable of these sorts of numbers?

For the year ended 30 June 15, CAPs spend on exploration fell 43% YoY whilst spend on admin (including "business development") fell 18% YoY.

Does the Board think that generating shareholder wealth is achieved by proportionately cutting spending on advancing the company’s only asset?

Meanwhile, since 30 June 14 the value of the company’s shares have fallen from 6.5c to 2.9c as at COB yesterday and is trading at a paltry premium to cash backing. A 12 month fall of 55%. That is, the value of your and my investment in Carpentaria fell a further 55% in the last financial year.

So now the company has $3mn left after spending $3.62mn last year. On that basis one assumes cash will need to be raised this year. Given the quantum of cash spent by the company each year and the appalling share price performance one wonders exactly who is going to inject meaningful dollars into this company, how management will find them, how much existing shareholders will be diluted and indeed how the company is going to survive at all.

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First stage marketing activities provide very positive market feedback on product quality of >70%Fe, that is, potentially the highest grade of seaborne traded iron ore in the world
CAP Price at posting: 3.2¢ Sentiment: Hold Disclosure: Held
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