Brigus Gold Corp. (BRD)

[geopic]

see TSX:FOR for follow up.
FOR is about .30 CDN
g.p.

[wshaw14]

New Web_site
http://fortunebaycorp.com/

[wshaw14]

http://ih.advfn.com/p.php?pid=nmona&article=61454235

[wshaw14]

http://web.tmxmoney.com/quote.php?qm_symbol=for

[wshaw14]

In reference to Primero, "The stock has a consensus rating of Buy and an average price target of C$11.07." http://www.dailypolitical.com/2014/03/07/primero-mining-corp-pt-raised-to-c10-50-p/

I will be trimming back a few shares there soon though, simply because I overloaded to get the Fortune Bay shares. I do like the company and will be holding a substantial position LONG.

[gharma]

yea, agree. in addition to your listed, the two properties in mexico, one having NI compliant resource of was it one and three quarters million ounces gold
But it is the team, the treasury to work with, and the Saskatchewan that look like a nice pairing

[wshaw14]

I agree about the possible opportunity with Fortune bay. I like the management team and the Goldfields project. They also have along with the $10M cash marketable securities from Everton and Cangold and retain future royalties on the properties they sold to Everton.

[gharma]

Thx for the updates/info Wyn - I have tracked PPP board but haven't had anything to say. I am still wondering what shareprice FOR.v will start at, and go through initially - could be an opportunity.
Also wondering if I'll be closing out my Primero position, it is close to some targets I have seen (if those are post BRD)

[wshaw14]

There is now a Fortune Bay board. Cant be pulled up by symbol yet, but should be ready to go monday. As for migration to the PPP board, I think I am the only one there.

[wshaw14]

Fortune Bay will be trading on monday TSX FOR. As for the OTC I am still waiting to hear.

[gharma]

I checked the TSX last weekend and could find no listed company by that name. Eventually. It shows as a numberish code in my account.
It has three main properties, around 10 million CA$, over 3 million ounce gold NI compliant resource from two of the properties, and a mgmt team that should be familiar fro BRD.
Some are already showing up on PPP board. More will likely be on the Fortune Bay board once there is a Fortune Bay

[jsc52033]

Will Fortune Bay ever trade/ What does it hold ? Will everyone now be on PPP vs here tia

[bigone]

I was thinking the same thing. Thanks....

[wshaw14]

If it works like my last one which was a spin off, the cost basis for Fortune Bay will be 0. Sorry it took so long to answer, but it seems IHUB was down last night.

[bigone]

So, what is the official cost basis for each share of Primero and each share of Fortune Bay for tax purposes?

[wshaw14]

"Confirmations of holdings will be sent shortly to former Brigus shareholders and optionholders receiving consideration pursuant to the Arrangement. Former Brigus shareholders as a group were also recently granted 90.1% of the ordinary shares of the newly incorporated Fortune Bay Corp. ("Fortune Bay"). Pursuant to the Arrangement, Fortune Bay assumed Brigus' non Ontario interests including the Goldfields Project in Saskatchewan and the Ixhuatán and Huizopa Projects in Mexico. It is expected that Brigus' shares will cease trading and will be delisted from the Toronto Stock Exchange ("TSX") and the New York Stock Exchange MKT ("NYSE MKT") in approximately 2-3 business days in accordance with the rules of the TSX and NYSE MKT".

[loanwolf]

Hi wshaw14, any idea when the Fortune Bay shares will be posted to accounts and/or a symbol ticker?
TIA

[wshaw14]

1 share of PPP for roughly every 5.712 shares of BRD and 1 share of Fortune Bay for every 10 shares of BRD.

[SilverEagle]

So are we receiving 1 share of PPP for each 6 share of BRD?
Plus 90% of BRD share counts for the new spin off co.?

[wshaw14]

Yes, and the new story is opening up well.

[laserhog]

well here we go, start new story

[wshaw14]

Primero Reports 32% Increase in 2013 Year-End Gold Mineral Reserves and 23% Increase in Gold Mineral Reserve Grade at San Dimas

" 23% increase in the Gold Mineral Reserve grade and an 18% increase in the Silver Mineral Reserve grade".

http://online.wsj.com/article/PR-CO-20140305-907752.html

[wshaw14]

Primero Announces Closing of Brigus Acquisition
Date : 03/05/2014 @ 8:22AM
Source : Marketwired

[laserhog]

i agree, have read all your dd you posted. been here long time, just seldom post. wanted to hear your feelings. looks like we are going in the right direction.

[wshaw14]

The buy out makes a lot of sense for both ends of the deal to me. Brigus did a fantastic job, but when the Gold prices tumbled they became constrained financially. PRIMERO has the resources to exploit the Brigus resources. Brigus will still have some good assets as Fortune Bay as outlined in my previous post and I will buy more of that also when the opportunity arises.

[laserhog]

not too many talking now a days, what do you think about the buy out

[wshaw14]

Primero and Brigus announce shareholders vote in favour of acquisition of Brigus
http://brigusgold.com/_resources/news/20140227.pdf

[wshaw14]

Fortune Assets
" means (i) all mining claims (whether patented or unpatented), concessions,leases, licenses, surface rights or other mineral rights in respect of the Fortune Exploration Properties, (ii) the office leases (and any subleases) of Brigus and/or its subsidiaries relating to Brigus’ existing offices located at 1969 Upper Water Street, Suite 2001, Purdy's Wharf, Tower II, Halifax, Nova Scotia, Canada, (iii) office furniture, office equipment or office supplies located at the office locations referred to in clause (ii) above, (iv) all fixed assets of Brigus and/or its
subsidiaries relating exclusively to the Fortune Exploration Properties or located within the boundaries of the Fortune Exploration Properties or at the office locations referred to above in paragraph (ii) above, (v) all of the shares of Brigus Gold ULC that holds the Fortune Exploration Properties, and the related subsidiaries of Brigus Gold ULC (vi) all joint venture, earn-in, other Contracts entered into by Brigus and/or its subsidiaries, and royalties or other similar rights that
relate exclusively to the Fortune Exploration Properties; (vii) the following marketable securities: 14

common shares of Cangold Limited and Everton Resources Inc., and (vii) all exploration information, data reports and studies including all geological, geophysical and geochemical
information and data (including all drill, sample and assay results and all maps) and all technical reports, feasibility studies and other similar reports and studies concerning the Fortune Exploration Properties in Brigus’ possession or control relating to the Fortune Exploration Properties.

[wshaw14]

Leading independent advisory firms ISS and Glass Lewis support plan of arrangement between Primero and Brigus
http://ih.advfn.com/p.php?pid=nmona&article=61111363

[wshaw14]

We shall see. I dont think those numbers jive, but we shall see.

[gharma]

The rough figure of 90 is not for taxes, it is for increase in taxes, per Q3 MD&A. I have to assume that is net of all consideration, deduction and whatever. Project all-in sustaining cost is with/withour Black For ? Actual was reported at 1077. Add the taxes plus anticipated increase, plus interest expense, plus obligated payments on properties, and then look at growth activities.
Bottom line is that they need to add $75 million credit facility to make sure the have financial flexibility to execute on plan.

[wshaw14]

One other thing we should keep in mind that the effective tax rate on the new tax is reduced by the fact that it is deductible on the corporate tax and is only charged on the net with a few items added back. The effective rate is around 5%. From my calculations, they would have to have a taxable income of about $297M (or $1800.00 an OZ) for the new tax to equate to 90.00 per ounce or $14.85M. I could be wrong.

[wshaw14]

As I said in my last post,Bottom line, Assets verses liabilities improved by $89,352,000 from 2012 to 2013 In a very challenging environment. I think there is a lot to be said for that. They are projecting 950-1050 All in cost for 2014. Lets take the middle and then add your 90.00 figure. 1090.00 (including 90 per ounce tax) per ounce is not too shabby. Of course that is assuming they will be paying 14,850,000 in additional taxes.

[gharma]

Annual 2013 costs dropped . . . with all-in sustaining costs4 of $1,077 per ounce

add about $90 to that just for the new taxes in Mexico

The Company recorded a net loss of $35.9 million ($0.31 per share) for the fourth quarter of 2013 compared with net income of $1.2 million ($0.01 per share) for the fourth quarter of 2012, mainly due to a non-cash deferred tax expense of $35.9 million in the fourth quarter of 2013 related to the recently introduced mining royalty tax in Mexico.

The Company recorded a net loss of $4.3 million ($0.04 per share) in 2013 compared with net income of $49.6 million ($0.54 per share) in 2012 due mainly to recording a deferred tax expense of $35.9 million related to the new Mexican mining royalty tax in the fourth quarter of 2013.

[wshaw14]

Primero Bottom line, Assets verses liabilities improved by $89,352,000 from 2012 to 2013 In a very challenging environment.

[wshaw14]

Primero Reports Fourth Quarter and Full Year 2013 Results, With Highest Revenues and Lowest Cash Costs in Its History in 2013

http://www.live-pr.com/en/primero-reports-fourth-quarter-and-full-r1050260956.htm

[gharma]

Nice read, thx. I hold an alternative thesis. There exists an agreement to hold gold down while/until Chinese reserves are positioned to a certain target area into gold. In return the US has gained an orderly reduction in Chinese ownership of US debt and the havoc that could have resulted for the dollar (which also benefits China). etc

[wshaw14]

I liked this truthful article.
http://www.thechinamoneyreport.com/2014/01/15/china-gold-price-decline-premeditated-u-s-has-started-a-currency-war/

[wshaw14]

SpinCo will be named, Fortune Bay Corp. http://www.brigusgold.com/_resources/financials/Circular-2014.pdf

Also interesting. "Upon completion of the Arrangement, Fortune will own certain of Brigus' assets including the
Goldfields Project (as defined in the accompanying Management Information Circular) in
Saskatchewan, its interests in the Ixhuatan Project, three concessions in the DominicanRepublic and its royalty interests in the Huizopa project in Mexico"

[wshaw14]

Agreed. "We will see some more clearly soon with the next report". Always a pleasure to engage in conversation with you.

[gharma]

We will see some more clearly soon with the next report.
I am not a fan of the PPP offer for the part of BRD they want to keep and see it as selling to them at a discount, even after taking the $CA 10 million they contribute to SpinCo into account. JMO.
Even using projected production the new tax is estimated by PPP to increase their tax expense over $100 per ounce over what is already on top of that $974 AISC. Whatever is and isn't deductible seems already taken into account in that $14 million estimate, and as far as I have yet seen is still waiting on the final implementation rules/regulations to some extent.
Through 2015 PPP has significant cash outflow, considering the note and the recent 20% purchase. Excess for cap development, explore/expand looks slim.
Of course all of above assumes gold stays where it has been held, against physical pressures, the better part of the past year. The odds that we see gold stuck at an even lower price before 2015 end is IMO not nil.

[wshaw14]

Well, we shall see when the reports come out, but unless I am missing something big they would have to crush their projections to be affected an additional 14M in taxes. even if it did affect them by 14M additional of course you would divide by the amount produced during that period to come up with a cost figure. Not what they produced in prior quarters. Looking at their cash flow for last Q and year to date at that point, they look to be in pretty good shape to me. Also keep in mind that the new tax is deduct able which affects the effective tax rate.
I would be interested in hearing how Brigus would possibly bring Grey Fox on line more quickly or at all without taking on a lot of debt unless gold prices improve. You seem to be negative on PPP. I am not.

[gharma]

The main thing that prompted my post yesterday was my surprise at their estimate of the net impact of the changes to Mexican law.
I had seen many MD&A say the impact was under review, but this was the first I had run on quantifying it, and it appears to show nearly a quadrupling ! of the expense. If such hold across the industry we are likely to see some very real share price adjustments in heavily Mexico dependent miners as it is more widely digested.

[gharma]

the number used for balance on the note is what was stated in their report as of quarter end
the report said $14M additional (i.e. increase) tax burden
I used 110,000 as it is what was used to get the $974 of the report

As I read it, after covering the increased obligations for purchase of the 20% of Cerro their %0% usable share of free cash flow, in absence of contribution from Black Fox or increase in gold price, will be stressed thin through 2015 and likely require taking on debt to continue expansion.

IMO Black/Grey Fox would very possibly advance more rapidly under BRD and current management if the current metals price environment continues or worsens.

[wshaw14]

One more question. Why would one use 110,000 ounces to figure?
"So, using 110,000 production for 2014 from San Dimas "
They are projecting 155-165,000. It seems to be more reasonable to use 160,000 oz

[wshaw14]

I could be wrong on the following and feel free to correct me if I am, but:
In reference to the Note (purchase)
5M 01/03/12 Payment
5M 12/31/12 Payment
7.8M 02/21/13 Payment
5M 01/??/14 Payment
? 02/??/14 Payment
The most the balance being carried is $27.2M
The interest on that would be approx 1.6M
On the New Tax issue, I believe the 14M impact mentioned is inclusive of the 5M you mentioned, The way I figure it, they would have to make HUGE strides to have enough taxable income to owe 14M additional tax, especially considering the new tax is deduct able.

I have seen places that say it is 5% and places that say it is 8%. I figured it at 8%. Do you know for sure which it is?

[wshaw14]

New Mexican Mining Tax
http://www.internationaltaxreview.com/Article/3228608/Mexico-New-Mexican-mining-tax.html

[wshaw14]

Thaks Gharma. I am well aware of that, but a good idea to make sure all are. AISC "it does not include capital expenditures attributable to development projects or mine expansions, exploration and evaluation costs attributable to growth projects, income tax payments and financing costs. In addition, the calculation of all-in sustaining costs does not include depreciation and depletion expense as it does not reflect the impact of expenditures incurred in prior
periods.". AISC does give one the ability to compare apples to apples though.
Also, the increase in production projected should decrease the effect of the additional items that you mention, and the increase is probably already figured in on the increase in tax estimate.

As for the financing. It is a good idea to have as much cash available as possible in todays market if it is on good terms.
My thinking is they will fast track Grey Fox to production.

[gharma]

Primeros Incurred ... all-in sustaining costs of $974 per ounce in the third quarter

Let's flesh that out a little. AISC does not include, among other things, taxes and interest expenses.
The discussion in the most recent quarterly financials says the company estimates $14 million increase in taxes due to the Mexican law changes. It is somewhat "iffy" to say over and above what this amount applies due to the credits recovery in 2012 compared to the lack of this in 2013, and the impact of foreign exchange, etc. All the same the report states $5.4M year to date in the taxes for the recent year, so I will just say taxes of at least $5M plus $14M = $19M taxes in Mexico 2014. A couple years remain on the note for San Dimas which will be fully repaid Dec 2015. As at end of Sept 2013 the balance was $32.2M which, given the 6% annual rate appears to indicate approx $2M interest for 2014
So, using 110,000 production for 2014 from San Dimas and at least $23M beyond what is accounted for in AISC it looks like there is at least $200/ounce more expense above that $974 AISC. When that is combined with current gold pricing and fact that half of the free cash flow from San Dimas is paid out as part of the promissory note agreement until that is extinguished (end of 2015) it becomes clear why the MD&A says Primeros is looking to enhance its liquidity flexibility

The Company expects its current cash resources, as well as ongoing cash flow from the San Dimas mine, will be sufficient to fund its operations and certain potential acquisition opportunities for the foreseeable future. Nonetheless, in order to enhance its financial flexibility, the Company is in negotiations with a major financial institution to secure a revolving line of credit of $75 million, which it expects to complete in Q4 2013, and is also considering other financing initiatives

Things will be more clear, hopefully, mid-Feb after we see the new quarterly report.

[loanwolf]

Got it, you can find me over here where I used to hang my hat with a good friendly group.
May be easier that way......

I may be a little more active soon and try and post some of the "juniors" I'll be looking at again


http://investorshub.advfn.com/Langluis-Big-Board-and-Options-Plays-11669/