Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Maybe not gone just yet. Guyer's executive employment agreement entitles him to 6 months pay for each year of service upon separation from employment. So he may be staying on as CEO awhile.
Perhaps instead of questioning the CEO's
ability and experience one should question his honesty and integrity
A worthless stock usually requires some proof that it is worthless to satisfy the IRS. This is why some brokers, as a courtesy to a client, may purchase your worthless stock for a few bucks.
Just because a stock is not trading does not deem it worthless; the IRS view is that there may be some assets.
Regarding Class "B"; they were never issued in street shares and they never traded on the open market and so there is no established value. Check the Annual Report...when the "B" shares were created the company gave them Zero as a balance sheet value. And they have a zero balance sheet value even today.
Class "B" were not a "dividend"; in reality just a device to create supervoting shares...which were then quickly issued for free to management in a transaction described as having "no material value".
Establishing a tax loss is a better idea than continuing to hold shares.
B shares were just a clever device
pushed by Guyer and approved by stockholders Feb. 2009 who were misled into thinking they were getting something for nothing.
Then Guyer set the hook in September 2010, issuing a total of 449,623,244 shares of restricted Class B Common Stock to himself and Rice in exchange for agreeing not to accept issuances of Class A Common Stock for a period of one year.
Then he upped the voting power of all Class B shares including his 92% share of them; giving Guyer complete control of the company without the necessity of holding shareholder meetings, also allowing set his own salary and sell more shares including two R/S to keep his salary going.
I say follow the money. Money has been raised through death spiral financing and that money has gone somewhere. Undoubtedly the CFO has profited through some manipulation of this financing and/or sales of his shares received in lieu of salary. His monthly shares in lieu of salary have either been received by him (and income tax liability paid) or an enormous number of shares due him would be showing on the balance sheets as an accrued liability.
So although we cannot exactly show what he has received; there is little doubt he has profited. And Fearn does not work for free either.
Monthly stock creation just keeping pace with the monthly salaries of the company officers.
There are no sampling results because real exploration costs tens of Million$. So the company presents all theoretical "metal in the ground" conjectures with no estimate for cost to extract same.
No sympathy for Fearn's "dream" here.
Fearn did OK. Sold a run-down Mill for $1 Million to CGFI which he acquired for 30K. Got all the design and construction work passed through him with salary, fees and mark-up. So even if the "dream" of a real mining company did not work out he has received more than adequate compensation for his involvement; thanks to the stockholders who financed all of this.
There is no incentive to perform. No results, still collect very nice salaries with no effort. Until that changes, this is a "PP" investment.
I agree it is an obsession to see what will happen.
Maybe new partners and money providers can leverage something from this. But it will be only for their benefit; book value is less than zero and there are no bankable or mineable mineral finds. All existing shareholders are destroyed by the R/Splits.
Painting the tape?
If there were assets they would be accounted for on the balance sheet.
Gold, silver in ground is just pie in the sky. Would cost 2 or 3 times what it is worth to get it out if the environmentalists would ever allow it.
Existing shareholders under the buss. In theory new shareholders might benefit if any asset found; but track record shows new shareholders will be overwhelmed with Guyer and Fearn created shares and insider payments, salaries, benefits, sweetheart deals to financiers. These guys share nothing with stock investors, not even information.
The minerals underground might be worth a fortune; but it may cost 3 fortunes to find them in commercial quantities, pull them out, and process them. And it may take 2 lifetimes to get past the environmental and permit obstacles.
To sum it up; all very costly and very uncertain.
And why should he care?
His nest is feathered. Non-communication with investors tells a lot about attitude towards investors.
It will happen because, PPS has collapsed so badly there are not enough A/S left to cover the Convertible Discounted Finance notes as they get redeemed. Guyer's answer is, more shares needed through R/S and announced intent to continue dilution afterwards.
Assume $1 Billion value in the ground; also assume $4 Billion cost to start up a mine, extract the ore, transport and mill it, pay Fearn his royalties off the top and dispose of tailings.
In the asbence of a detailed drilling and sampling program with a mine development study my estimates are as good as any other.
Modrica I think your math on 8K report is correct.
Either way, dilute to 1 Billion shares before the R/S then dilute more; or do the R/S and dilute afterward; the 8K says the A/S of new shares can go to 1 Billion.
1 Billion new shares will be the same as 500 Billion old shares.
Death spiral financing, IMO the end is near...BK or taking any good assets private - either way with Guyer and Fearn holding hands into the sunset with whatever A share investors have put in.
SanBruno, you were right on the mark with your financial analysis of CGFI. Capital needed, plus share projections and the R/S.
Analysis beats Happy Talk, everytime.
Modrica,
I am thinking the money has gone mainly to years of executive salaries and sweetheart discount financing deals. Any other funds that were spent towards the mill and improvements will also be converted to him when he declares BK where he holds the second mortgage. Or going private could be a possibility using his "B" share votes.
As Brendan says, this deal is "lower than dirt".
IMO
Maybe I am not understanding this NI43-101 issue. But IMO; if the report is just preliminary then "in the ground" reserves cannot be claimed for 10Q-K purposes.
So the sole and limited use of the report in its present form is to show to possible funding sources for completing the mine purchase. And these deep pocket folks can make their own evaluation about mine development cost, extraction cost and return of their capital. Or, even to pay for sampling and proving of reserves.
And what's the problem with that?
The shareholders could be shed quite easily in a bankruptcy; with Guyer and Fearn taking the Mill to cover the amounts owed to them.
Hobson's Choice: A shareholder cannot know which is better.
A skilled partner might do better in completing or running the mill; or have deeper pockets. But inviting a partner in will be terribly dilutive of any profit as far as existing shareholders are concerned.
Gold that has not yet been found.
Gold to be hopefully found, mined and milled at some future date; with unknown exploration, mining and milling cost.
SanBruno;
You are ..Quote "..curious why I am apparently the only one questioning the lack of an 8k.."
You are not alone in your curiousity, because, that is what one would expect from a fully staffed fully reporting company. But this is no different than CGFI's past performance on the several deals they have tried over the years. Acquisition deals made, then abandoned, no reasons give, no 8K. Where did the money go, who knows? And on to the next proposed acquistion.
I did not say the SEC or accounting reasons would prevent the purchase; the question is, what will be the balance sheet impact value for the cash outlay of $3 Million?
10K disclosure seems to indicate Fearn paid $80K for the property which is all the prior owner thought it was worth. Others on this board think the property is worth $Billions which makes the $3 Million purchase an unbelieveable value. Someone must set a value and justify it.
One reason the mine deal is being delayed, IMO; is these hypothetical mine assets cannot be verified from an accounting and SEC point of view.
So, cash outflow of $3 Million to Fearn giving no corresponding increase in assets to CGFI would make the balance sheet look even worse. The deal must be put on hold until Mill revenues can cover the cash outlay.
The March 6 missed event not really material to the company; just the latest in a long string of CGFI proposed acquistions and proposed revaluations followed by disappointments and management silence.
It's unlikely your idea for "A" shareholder control would change much; IMO. Recall there was less than 5 Million "A" shares in public ownership at time of R/S 5 months ago. Now there are more than 100 Million "A" shares; at least half in hands of insiders and financiers. So if these people vote what would change?
You could be correct of this being possible set-up to take company private with current insiders getting control.
IMO, the $16.6 Million increase in assets will be a market value estimate tied to increased value of the Mill property.
I really thought CGFI would hold around $0.20 until the Mill came onstream but then the Silver Wing and Champion deals were made with high dilution and unknown CAPX. Now I think the bottom cannot be predicted.
So we agree; more dilution to buy speculative old mines. IMO the Mill is of key importance.
With just $5K in cash, how is that going to happen? More dilution with a 30-40% discount to the loaner?
2 PR's are not that great, just old information in a new wrapper. Everyone knows there is metal in the ground. The market just does not believe it can be economically extracted.
It means these shares have no rights to maintain the same percent ownership of the company as they currently have; in other words, no protection from dilution.
Most likely conversion of old debt preparing to sell and unwind their loans. IMO; if this represents new investment then one must assume they have inside information not available to the general investing public.
I think the bond will stay with the property for eventual clean-up. It might get recalculated to a smaller amount based on satisfactory work done; or even increased due to increased scope of operations/footprint. Certainly the environmentalists will insist on maintaining a bond in a satisfactory $ amount.
Are you thinking there are no cash needs for the $3 Million purchase of the Champion Mine due March 6th?
All is accounted for in the 10K's. Nothing's wrong with CGFI's Audited Financials.
SanBruno: the small cash balance is not a mystery IMO.
Small companies with no cash often give stock in exchange for services. Accounting 101 will remind you this is shown in the 10K and 10Q’s on the balance sheet line as Additional Paid in Capital. Check the trend over time. The 10K shows $4 Million in the prior Fiscal Year, and the 10Q shows the trend increased to $1.6 Million in the last quarter. Total accumulated deficit $25,000,000. expenditures and salaries as of November 2012; all without ever showing a cash balance.
This well explains ongoing dilution and dropping PPS while meeting expenses and salaries all achieved without SEC filings other than 10K and 10Q reports.
They have only 3 employees; so there is no accounts receivable/payable personnel; no payroll or benefits department; no stock clerk; no HR department; etc. IMO it is all funneled through a middle man who is given shares at a discount to perform the necessary functions.