Mexus Gold US (MXSG)

[TMLonggun]

Yes. There are two components here, we have a solid mining company with no cash. You could have all the best claims and management in the world but if they need $3 million to build out their mining facilities and they have a LOC of a couple hundred K and their burn rate is high, Mexus may not be in good shape at all. Whereas if it is cash, and already paid, construction will be complete in a couple months; if our money is delayed 6-12 months (more than reasonable at second read of the terms) then construction will be delayed 6-12 months. Instead of making many millions (more than the deal) we will make $0 in the interim from our heap, which is the most important skew for Mexus.

All they need to do is fire up the loader and buy some cyanide.

Gross oversimplification. So they have to just do like Mexus did when they had control of the mine for the past year? Just flip the switch and make easy millions, get-rich-quick? Production last year was inefficient and required multiple stops and starts even with cash and the best of intentions. They got at least six months of production out of it (They had almost one full year without Ken) and they earned less than one million dollars combined from all of their operations including Rancho, for a huge net loss. At this rate it would take them infinity years to pay us. Can the former JV be profitable? Definitely! But Pursuit will still have to invest a big chunk of money (that they do not have, at least not yet) to make it so. Spending only on the bare minimums will get results in kind. What happens if a year later they have only made >$2M in profit (many, many times what Mexus earned)? We might be holding that security interest for a while.

You also hugely overestimate the dollar value of Ken's thefts, his pilfering was not the main impediment to profitability.

You may think it is being nit picky but following research to its conclusion is much more valuable (to me and my portfolio) than just assuming and wishing.

It is not the least bit unreasonable to wonder how a company worth $600 grand is going to invest a couple million into the plant and then pay us $4 million in a manner that can directly benefit our own properties in the short term.

I would venture it is impossible for them to do so without raising a large amount of money themselves, and given their share-count and our new investment in them one course of action comes to mind for Pursuit who just finished a reverse split and that is dilution.

If you think Pursuit can "net that easily" you should buy a few FPV shares, it has been up and down from cents to dollars and back again many times and with this acquisition they are worth more than $600k.