Sure. I did use strong words so I should defend them. John Winfield structured the entire company in a way that he would benefit himself no matter what happened. Gold price goes up? He wins, stock appreciates, he gets fatter NSRs. Gold goes down? He wins and gets more dividends and a larger percentage of the company. If the company struggles for a few years and then takes off? Best case scenario for him and he wins mega big, having acquired the greatest amount of the company possible (due to low pps) and so when gold and silver go into a bubble and he will finally be a billionaire and can get into the better parties he craves. Much of this gain is at the expense of the common shareholders. In a way this is his prerogative as the man who put up the bulk of the money and time actually acquiring the pieces of the company. He took a lot of risk and put a lot of time and money into this and should be rewarded if this is a success. I get that. But that doesn't make him an honest man nor excuse his business practices. JW at one point had all of GSPG's loans in default, which is what he wanted. He knew it would happen because they were a development company years from production and they had no possible way of repaying anything and he was lending large amounts at high rates that reset to even higher rates when they went into default. The interest rates and some of the CD terms were border line criminal but he had his ceo, Faber etc, just rubber stamp whatever was on the desk. You can find quotes of Winfield on the net saying he wanted the share-price to go down. At first glance that would be a very odd comment, except when you consider that all of his exorbitant lending to the company is rolled back into equity and he will own a larger percentage of the company the more his debt festered and atrophied over time. It appears to me Winfield would rather own 90% of a small pie rather than 25% of a gigantic pie. Winfield is one of the biggest elitists ever and is a guy that almost assuredly cares more about dogs and cats than people (outside of his personal circle). I actually got the vibe from him that he is kind of a psychopath and that he views people, aka common shareholders, as things to be taken advantage of. All of his history seems to back this up. Including events in his personal life, the loans, the numerous past lawsuits against him, lode's structure and game plan, and even the blueprints and tactics he used building his hotel companies and other businesses.
Big money always gets preference BUT by structuring the company in such a fashion he has hugely eroded the PPS and confidence over time. Like I said earlier, in a way its his company so he can do what he wants. But that sort of mentality (all for me, screw the little guys) is not conducive to supporting the common share price and getting people to invest. And this mindset ends up hurting the company in the long run because now they must raise money at a lower pps and there are more shares than otherwise would be. I can guarantee you the price would be higher if Winfield was more a "what's good for the goose is good for the gander" kind of guy rather than a "me, me, me" kind of guy.
If it was my company I would roll all of the corporations together instead of holding a bunch of fractured pieces that undermine the greater company. I also would not have strangled lode with debt in the same manner just to increase my position. Why does Winfield have so many entities where only he receives dividends and NSR? Instead of having just one company he has satellite vulture/tick companies that feast and suck blood from the main lode entity.
Corrado is complicit because he is Winfield's man to the core and all of his bonuses and incentives are based on metrics that may deliver zero value to shareholders but ensures that Corrado will be a very wealthy man regardless. He is close to accomplishing all his goals and getting some absurd number of shares despite creating zero shareholder value. How could that be? His options should be based on eps or something that would actually incentivize him to produce profits. The stock could be at a dollar and gold dips and profits might be another year or two off. That is crazy and I definitely blame management for the lack of profits, the excessive dilution, and mismanagement of the project. If you would have told me years ago lode would not make a profit in its first two years of production with gold above $1200 with an open pit MC bulk heap leach style mine I would have said you're nuts. These types of operations are low cost and tend to make good to decent money right now at current prices for the vast majority of owners. Lode is not one of them. A mine should not have a one year, two, or five year ramp up period where they lose money on everything. That would be completely insane. Ten years of hemorrhaging money to develop a mine and then three to five years of mining with no profits all to get to year thirteen-fifteen? Yikes. No wonder the market is not impressed. Even after they earn their first buck what about the 100M that went into the project? How long will it be before lode earns a $100M? At this rate it is infinity years. Lode should have been in profits within one quarter. Two or three at most. Two years+ is complete madness and negligence on the part of management and the rough gold market is anirrelevant fact when grading management's performance since others easily make lots of money within the same types of operations and conditions. They should have known and prepared and scaled the business to conditions to ensure we are not a going concern. That is the whole point of the 50 million dollars they spent trying to figure out exactly how to mine their land at a profit. Why spend it at all if it was completely pointless?
This is just the tip of the iceberg but I will keep the rest of it to myself. I hope that at least somewhat explained myself. I still find the word "rape" to be somewhat apt, although I do apologize if I offended anyone (except CdG and JW).
