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There is a lack of capex control at Metorex - Adrian Saville from Canon Asset Management.
In an interview on SAfm @ 18:25 on 28 November 2008
[miningmx.com] -- THERE is evidence of a lack of control over capital expenditure and project management at Metorex, said Adrian Saville of Canon Asset Management.
"You now have ownership in a business that is predominantly exposed to a resource that has been heavily sold off, and the business itself - there is evidence of lack of control over capex and delays in completing projects," Saville told SAfm Market Update.
"I think all of those factors together have to emphasise the question mark over Metorex," he said of the plans within the diversified, copper-focused miner to raise R922m, partly through a rights issue at R2 that was priced substantially below prevailing share prices at the time.
"But, having said that, I think in the fullness of time the business will right itself, notwithstanding these hiccups. And if it does right itself unfortunately the shares that they
are issuing now will erode the earnings that we think this company was capable of producing," Saville said.
Peter Major from Cadiz Corporate Solutions said: "As long as you are allowed to follow your rights you can make up a heck of a lot of your loss, but you're not going to make it all up.
"If you're not allowed to follow the full number of rights you've got, or the number of shares you've got, you're really going to come short on this. It's shocking. My legs are weak, I can't think of anything that I've seen in 19 years come close to this."
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