Update from PT:
Paul Thompson, CEO of Mexus, stated, "I don't want our shareholders to be alarmed with the time frame of this negotiation. These are large deals that take time to put together. We will notify our shareholders as soon as the ink is dry."
Fair enough...glad we got another update to prevent inevitable head scratching. Yet I still wish we would have received cash from SF and cannot help but wonder where we'd be if instead of a 4M note we had 2 M cash, we could easily start the underground and scaled up. Cash would also make these current negotiations redundant, strengthen our bargaining position, and would have put us in production and would have had construction for the heap side close to completion by this point, all while maintaining 100% of our best property. Instead we continue to dance the Mexus Limbo and time is ticking by. Negotiations take time yes, but an investor's money also has a time value associated with it. Mexus is down 35% YTD while my longgun portfolio (with Mexus excluded) is up almost 200%. When I average in my overweight Mexus position I can't help but wince.
I do not like that the language in the PRs has changed from desiring a firm to "consult and partner" with to "potential suitors," which in my mind implies a buyout or that we are giving up a large stake. You don't woo a partner, you woo a buyer.
Now I am not usually one to complain about deals like this as half of a billion dollar pie is better than all of a 20 million dollar pie. But why not keep the billion if you can? Maybe there is a way to borrow against the unpaid note or use conventional debt financing that would be more beneficial to the company.
I will await the terms of the deal to judge of course but I think it should be considered this sort of deal (partnering/operating with a major) is only worth it for Mexus in these circumstance if the other side brings a lot to the table and fills in Mexus' weak points.
1. Fresh Blood: The company must be a major, with a billion dollars of market cap or more to be ideal. No First Pursuit please. This gives us access to a large shareholder base that now has their company's seal of approval on Mexus. This is key for rising share prices. If you want your stock up you either make money or promote, this is promotion of the best kind.
2. Cash: This level also tends to have access to capital and cash, which presumably they bring to the table financing construction and potentially covering some share of operating costs, and help them acquire good deals on equipment using their pricing power.
3. Expertise: Some of the partnering company's management should join and flesh out Mexus' BOD. This would go a long way to answering criticisms about the one man band aspect of management.
4. Production: The deal must lead to materially quick and sustained production almost immediately.
5. Upside: The deal must not sell Mexus' soul. Eg, being bought out for $20 million would be a crime. So would giving up a massive royalty or 50%+ of the profits. Paul should know what he has and negotiate in kind... which takes us full circle to "another two weeks."
AI
