Legend International Holdings, Inc. (OTC:LGDI) dropped 20% in fear of possible flooding at the Mt Isa Phosphate project, but the recent management announcement should have lifted the worries.The share price should be expected to come back up today, as the latest news release said the floods in eastern Queensland, Australia have no effect on the company’s phosphate project. The mining operations and the transportation continue to work without interruption.
The price collapse wasn’t very damaging as the stock had just run above $1 at the end of December. Previous range was set in the 80 – 90 cents interval, which was broken when Mr. Manish Gupta rejoined the board of directors in late December.[BANNER]
In general, the business is going around with a track of an unfavorable financial situation and no recorded income whatsoever. Legend is working on phosphate projects in Australia and has ambitious plans to start producing an average of 5 million tonnes per year of 30% phosphate rock concentrate by 2012.
LDGI holds a very healthy balance sheet with about $40 million in liquid assets, but at the same time the company is burning money fast enough to have nearly all of it spent by 2012. Furthermore, investors are still waiting to hear about the financing strategy related to the Paradise Phosphate Project.
