Regulatory authorities are usually the subject of quite some criticism, both in Australia and overseas. This week, however, I think they deserve a firm pat on the back.<\/p>\n
Both the Australian Stock Exchange and ASIC jumped on a small copper explorer this week preventing sheer market madness to take hold of its share price and management from giving itself a few extra millions through some deep in the money stock options.<\/p>\n
I am not in any way, shape or form suggesting management at Australian Mining Investments (AUM) is writing another chapter in the book of great resources swindles, a tradition that carries names such as Poseidon and Bre-X, but there appear to be enough reasons to remain suspicious, if not concerned. It is obvious both authorities had similar thoughts.<\/p>\n
Looking upon the events of the past few weeks, investors and speculators have either become victim of the rather clumsy PR mechanics of a few old school mining veterans (somewhat excusable from a miner’s view) or they have fallen into the trap of a smart investment ploy.<\/p>\n
It doesn’t take too much imagination to visualise the second option: an unknown, barely traded company publishes some vague, but highly promising indications about what might be under the ground (details can always be changed at a later stage); all of a sudden the word is out "possibly the biggest discovery in two decades"; someone tips a journalist at one of the daily newspapers (they’re always keen to have a scoop with their name attached to it) and to top it all off there’s an unnamed broker who is about to issue a report on the matter and who thinks all this could be worth, let’s take a not too ridiculously high figure, let’s say $25 a share.<\/p>\n
And oh yes, Xstrata is nearby and looking to buy some assets.<\/p>\n
Perfect!<\/p>\n
I’d almost say, works all the time. Especially at times like these.<\/p>\n
What makes the whole thing even more suspicious is that after the unnamed broker had been identified, a copy of the flagged research report could not be provided.<\/p>\n
Hmm.<\/p>\n
Assuming option one, my first advice to management at CuDeco would be to hire a professional PR agent. As an old school journalist I actually cannot believe I am saying this, but one simply cannot let a few miners handle matters as important like this \u2013 just look at the past few weeks.<\/p>\n
The second thing is, of course, to raise the sub-standard way of providing information about the resource and the drilling results. Am I looking in the direction of the ASX? Yes, I am.<\/p>\n
Ultimately, of course, it will be up to shareholders and investors to decide what happens at the company. I may be wrong, but I fear that the genie is already out of the bottle at CuDeco: common greed is waiting to kick in.<\/p>\n
I think management will have its desired stock options soon, probably next month.<\/p>\n
I hope we’re talking possible scenario number one.<\/p>\n
Till next week,<\/p>\n
Your I am sure just like you all this story will have a long tail editor,<\/p>\n
\nRudi Filapek-Vandyck<\/p>\n
(Supported by an equally sceptic Fab Four: Chris, Greg, Terry and Rob)<\/p>\n","protected":false},"excerpt":{"rendered":"
Weekly musings from your editor.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/51982"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=51982"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/51982\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=51982"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=51982"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=51982"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}