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lse:FDI Main Discussion

lse:fdi

#82

Last top up for me today… average now finally below 10p; major shareholders’ averages must still be nearer 20p having not sold any at all - in for the long term.

If FDI survive, the plan must surely be:

  1. keep production to schedule, year on year
  2. try to achieve better diamond sale returns, especially after the Argyle mine closes next year
  3. decision to do the 3rd cut - to double the potential volume of kimberlite which will be mined & substantially increase the NPV of the whole enterprise & company
  4. pay off the loans as rapidly as possible, to maximise profits thereafter & the share price.

The current company market price is ridiculously low at just £3.1m given the cash in hand at £20m, the asset value of the mine & the diamond resource - but has been driven exceptionally low because of the debt still to be serviced & present electricity supply problems. It should be remembered that the share price is also moving substantially on very low volumes in reality; so could easily move the other way on the same basis - especially if FDI directors start to accumulate their holdings if the business turns around.

I expect matters to improve once the electricity supply is re-stabilised and the Resolutions are approved on 17th October so the two main bond holders can continue to get shares (to average down their cost per share without being forced to make any offer for FDI as their shares increase above 34% each) in lieu of cash interest payments.

Still very high risk… a lot more large, coloured, high quality diamond finds would make a great difference.


#83

You are right to mention the low volume. It has fallen precipitously on a few hundred quid!