News

August 27, 2008

Central China Goldfields Has The Optimum Plan: Cash Flow From One Asset To Fund Exploration On Another

By Rob Davies

Company directors investing new money into their own companies is a rare event these days. This is something we shall look at in much more detail next week, as it’s not normally for want of trying that directors rarely trade. But all too often the perception of other investors is that the flow of funds is from the treasury to board members, rather than the other way round. While it’s true that some mining company directors do live extremely well off their companies, it’s also true that there are many more directors who are not particularly well paid, and who are instead incentivised mainly by the possibility of increasing the value of their own shareholdings through good honest work.

But if you can step around the hugely restrictive dealing rules, there can be few signs of greater confidence in a mining company than if those intimately involved commit their own capital, especially if it’s in the wake of fresh drill results. So the news that the directors of Central China Goldfields contributed nearly a quarter of the funds raised in a recent placement must be encouraging. Then again the recent drill results at the company’s Nimu copper property, such as the intersection of...