| GLOBE URANIUM LIMITED - View Question |
Q: Dear Mark,
GBE is currently trading at 22% below cash backing (That is 10m less 44m in the bank). Whilst I understand that cash is critical for a non-producer, may I suggest a buyback of between 7m and 14m shares at current prices. Less than 5% of issued capital, so not requiring shareholder approval. Current expenditures in total is about $2m a month, on exploration and development and corporate overheads.
GBE is fairly illiquid anyway. To buy back any decent amount of shares would have to be done slowly so as not to artificially push the price up. But as part of an overall strategy (keeping cash on hand for Kanyika, drilling other prospects, other farmins/acquisitions, $1-2m isn't much).
Also bear in mind that the interest we earn on the $42m ($40m by end of Jan.) is approx. $2.1m pa (which would fund the buyback). It is a very modest amount. But it does add value.
It also send a message message to the market about management's belief in GBE's value and says that we are cheap.
Buying back shares, well under cash backing, is always highly value accretive per share.
Cheers
Ken
GBE shareholders
Asked By: monopolize
Asked On: 06/01/2012 EDT |
Votes: 3 Views: 157
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A: Login or signup to view company response
Answered By: GBE
Answered On: 05/02/2012 EDT
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