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.
Trust me, I plan to do just that, probably within a month. :)
I posted a link on here a few days ago to a PDF on the patent coverage within the Li On battery space. If you missed it, it's worth going back to find. Valence has one of the best patent estates in the industry. But they don't have money. JCI has money, and a big footprint in the industry, but their patent coverage is atrocious given their size. Now they face Wanxiang, with their deep pockets and A123's patents. I think they need Valence. What is interesting about A123 is that back in the summer of '12 Wanxiang offered 450 mm for 80% of the company. They were turned down, only to wind up getting 6 months later for 250. But that original bid shows where the big players are willing to go for IP.
I suspect this case is going to start picking up steam soon. The two IBs were retained in mid February with 3 month engagements. That would put the expiration around mid to late May. They can be renewed obviously, but I think this was the timeframe that Berg & Co were looking to find new partners/acquirers in. My best guess is that we see a JV with Johnson Controls. They desperately need to beef up their IP, Valence has great IP, and JCI has budged $$$ for acquisitions per their recent presentations....and they were mentioned in the engagement letters as a pre-identified interested party.
>>I am thinking; no praying GBG may have a JV with Waterton Global Resources ? Business people are refering to this as an equity deal and not an acquisition???
People are referring to Waterton as "private equity"...because that is what they are. The 'private' part means just that....or as the soup nazi would say...."no JV for you"
The current Hollister deal only seems absurd because most everyone here has convinced themselves they are going to become millionaires with this stock.....but when you take a step back, the real absurdity is thinking GBG will make you a millionaire.
There is not a sliver of an iota of a chance on a JV in Nevada or South Africa. GBG wasn't looking for JVs to begin with.
>>Agreed there is no way to but a value on GBG at this time
I disagree....it's deceptively easy to put a value on GBG at this time (hint: it's a round number)
Which lawyer? The class action attorney?
>>be carefull, this company has one of the most dishonest founders you can find. he dont care about anything but having fun making money off of others, in this case shareholders.
If your assessment was correct, this case would have been wrapped up 5 months ago.
What about them? Berg owns roughly 1/2 the equity - all major inst. holders sold out late in '12, and they stand last in line for value given this is in Bk - it all hinges on if and at what valuation new investment dollars can be raised. I personally think Berg needs to onload a major partner, and I don't think he has much interest in letting them in at a cheap valuation below the claims hurdle. But that is just my opinion.
One of the better IP overviews I've seen of all the players in the Lithium Metal Phosphate battery space:
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&ved=0CGcQFjAH&url=http%3A%2F%2Fwww.fist.fr%2Fen%2Fip-overview%2F709.html&ei=vASEUfYJi6b2BMKTgagF&usg=AFQjCNESezA42WabpVxGbnRVLsudjROY5g&sig2=k7AMrigfOS01WqOaENYO7A&bvm=bv.45960087,d.eWU
(link is to pdf download)
Why isn't the IP on the books? Is that the question? Because R&D has to be expensed under financial reporting standards.
Top U.S. assignees in the lithium-ion battery space, ranked by their lithium iron phosphate patent holdings:
http://www.cleantechpatentedge.com/wp-content/uploads/2012/11/A123-US-only.png
http://www.cleantechpatentedge.com/2012/11/a123-patent-valuation-and-chinese-cleantech-investment/
A123 had negative book by the time they went into bk - they were running huge quarterly losses - really huge - and it went in a highly contested auction for around 250 mm. To the extent there is value here - it's off-balance sheet - principally the IP.
The lithium iron magnesium phosphate platform:
http://www.valence.com/why-valence/patent-portfolio
Are there any buyers from today or yesterday lurking around on here? This thing has been quiet for a long time - very curious where the new interest is coming from.
The BRP is in South Africa.....the Canadian process is called CCAA.
I don't know that T.A. works down here in the dumpster on a Wall Street back alley.
http://www.valence.com/sites/default/files/220_-_5-1-2013_stipulation_to_extend_deadline_for_the_committee_to_file_a_complaint_re._pre-petition_liens.pdf
I do see the UCC and Berg Enterprises have stipulated to defer the deposition of Carl Warden again. The UCC wants the deposition to potentially challenge Berg's debt holdings - under the theory of deepening insolvency loans can be recharacterized as equity under certain circumstances. The only reason I can see for the UCC to agree to defer is that the issue could be rendered moot. I.E., unsecured creditors get paid in full - there is no need to go through the cost of depositions and motion practice. If creditors are paid in full, equity is on deck. If there was no chance of creditors receiving full satisfaction - they have a very small slice of the claims structure - there would be no point in extending the deadline.
Who is lifting shares at .024? Anyone here?
Good point Damnsammit!
http://www.witsgold.com/investors-and-media/in-the-media/2013/wits-gold-preparing-bid-for-burnstone-03-20-2013
"Wits plans a different underground development model to that of Great Basin, and one that would take three years to complete. The focus, once it is in production, is to generate cash to return to shareholders, making Wits an attractive dividend play for investors."
They aren't going to pay up for a project that would take 3 years to redesign. They say it outright - "Our challenge is to not overpay for the asset. If we get it at the right price we can make a real success of Burnstone. Otherwise we are quite happy to walk away," he said.
http://www.witsgold.com/investors-and-media/in-the-media/2013/wits-gold-not-afraid-of-mechanised-mining--not-even-at-burnstone-02-21-2013
"The acquisition of Burnstone would immediately change Wits Gold’s status – from explorer to producer – while raising its overall gold ounce targets. “We have good management capacity with a proven track record and have access to funding (US$100 million) to ramp the mine up to full production. However, we will not overpay for the asset, and have entered the bidding process set up by the owners of Burnstone. Our bid, based on a detailed due diligence currently in progress, will be based on getting the best returns for our shareholders.”
Looking through the supplemental declaration in support of the sale, I'm thinking we are probably going to see a similar arrangement on Burnstone. Nobody is going to want to pay 300 or 400 mm for a property that needs another 100 mm of capex in this environment. Based on what transpired with the bids on Hollister, I think the creditors see the only way to potentially salvage value is via the NPI agreements. I bet we wind up seeing 100 mm cash plus a NPI capped at say 300-400 million - which would have a present value of 50 mm - right at my 150 mm guess. If I was a creditor, I'd be pushing for this type of arrangement as it at least preserves some chance of future recovery.....but equity is toast with this route.
http://www.gcginc.com/cases/rodeocreekgold/pdflib/448_50301.pdf
You have to take two zeroes off the size you are seeing - not sure why some feeds are glitching it up, but L2 shows 144k.
GBP - I think I owe you an apology. I've been overly harsh because I took your colored and fonted text for hype. You are more realistic than I first suspected. Anything can still happen here with Burnstone. I'm here because I love miners despite the last 18 months, I think they will eventually deliver again, but I'm sick of the BS miner cult that got us into this mess in the first place. This is a really great board on Ihub - best board for a miner that I've come across, even on the Canadian side where miner boards tend to be more active. I'm tentatively planning a Nevada/Utah/Montana trip to camp and check out some mines in July - I'll meet you at the Belagio pool if you want.
No, but she has been heard on multiple occasions warming up backstage. You could hear her voice in the POG the last 6 months. She was singing Fa la la la as the production numbers at Hollister were falling. DO RE ME when there was no acceptable stalking horse bid for Hollister. SO LA TEE DA when it came out that Waterton won the bidding. FO MAT E SUM ??????? when the the Plan of Liquidation came out. You are waiting for the Fat Lady to hit the high note, keel over and crush you aren't ya?
I would hazard to guess that that determination was made prior to the conclusion of the auction.
It's stipulated in the APA that Waterton can currently go and interview GBG employees and in essence draft whoever they want. They will take all the miners - those guys are in really short supply, not just in Nevada, but everywhere. I'm sure they will also retain the geo and mine engineer, even if only for a brief stint. Given the performance of the mine over the last year - all downhill - I'm less certain that the head honchos on mine design will be retained over the medium to long term - but that's their problem. The finance guys - they are probably gone - no aspersion on their qualifications - but Waterton already has all that in-house.
>>As far as GBG is concerned and the creditor goes away with the deal it looks like 90 M so whats the difference
The creditor doesn't go away, they wind up with a deficiency claim for the difference. I've never said it was hundreds of millions as alleged earlier, but it doesn't go away.
>>Oh and by the way for the most part you were right with the Hollister deal however we did do quite a bit better than the 60 M but not by as much as I was hoping for
They didn't do better than 60 - not sure how to convey that a NPI capped at 90 is not worth close to 90. An insanely great deal coming out of the SA BRP would swing me - but I think at this point there are better odds with powerball lottery.
>>Even if they sell the big mine with some luck GBG may operate as a going concern and develope another property hey they have the right experience to do it awesome now so cheer up son.
The right experience? They are one of the only gold miners to wind up in CCAA in the last several years - the only experience they have is in how to not attempt entering production. And what other property do they have? I'm not sure they could run a mine even if they struck a thick vein of fairy dust.
Next price trigger is .008 Coho.....let it rip...don't just buy with one hand....buy with both and use leverage if you can. Lol
Where to begin? Marshalling of assets isn't a process that is applicable here, at least not in the way you need it to be. It's a process for determining relative priority between creditor classes....ie sharing....it's not a process for sharing between creditors on one hand and equity on the other. The interco claims may be different if they are subordinated to unsecured claims, which they usually are....but even if they aren't, interco claims only divert more money up to the holdco where unsecured claims still stand in front of equity....ie it won't make a difference here.
So let me get this straight, you think CS got the shaft here? And your corollary to that is that shareholders didn't? Let's walk through the logic of that first. First, CS is a TBTF bank, and on the equity side it's pretty much retail, even Van Eck is merely a conduit for more retail holders. Second, CS is the secured lender - the highest of the pecking order in bk, and equity by contrast is the very lowest rung. CS has been a part of the approval process every single step of the way from the time they filed till now......equity has not been a part of that process and has been the last to know everything. Lastly, CS has signed off on this deal - they aren't going to object....THEY'VE ALREADY SIGNED OFF. Equity hasn't even been consulted. But you still think CS got the shaft and equity is better off with this deal?
Logic aside, this is how the mechanics of it work. Hollister will have 15 mm cash plus the NPI. The NPI will be appraised - a process of discounting possible future payments for both time and probability - this is a quite common occurrence in bk, esp. with biotechs - I'd guess that will come out to around 10, maybe 15 million (but as you saw from last week, I tend to guess high). CS basically gets all of that because they are secured, less the 1,000,000 bone they are throwing to the unsecured creditors of Hollister. So let's go the high road and say CS get's roughly 30 mm at the Hollister level where they are secured. The difference between their secured debt and that 30 mm becomes a 'deficiency claim', which is an unsecured claim at the Great Basin Gold level (because CS would have had the holdco guarantee the debt). The SR Secured Notes will work the same way to the extent their second liens on the subsidiary assets aren't satisfied at the sub level. So here is the problem, you as an equity holder of Great Basin Gold are behind the unsecured 'deficiency claims' - what was the secured sub debt that didn't get satisfied by the collateral. (BTW, RB - this is the process whereby some debt rolls up and some doesn't - the trade creditors are rarely smart enough to get a HOLCO guarantee - so some will and some won't - can't quite figure out how you didn't know this)
The quick way to remember it is that crap rolls down hill and we retail guys are all down at the bottom. :)
Waterton is very successful - a big part of how they do it is structuring very good deals - guess which end of the deal you are on? Let's say they turn this sucker around quickly, and make a net profit of 15 million next year - a quick 100% return on their cash investment in just the first year - and then they do that each and every year for the next 20 years - which is all pure gravy. That's a whale of a fantastic investment....right?....for Waterton. How much would the NPI pay out under that scenario? $20 mm over 9 years - present value - roughly 15 mm. There is plenty of sillyness to go around - but the only ones truly having a gut busting laugh over this is Waterton. This ain't no $110 mm dollar deal on Hollister. :)
Not everyone.
To the extent they find new money, I can't see where that party would agree to money in just to pay Berg out, not even a little bit. I would think that all new money will be earmarked for W/C as a condition of the equity infusion they are currently looking for. Whether they would also seek at least a partial clearing of Berg's debt into equity - I don't know - I'd guess that the structure would have more to do with preserving the NOLs than anything else. So long as the new money comes in on a pre-money valuation of the company that exceeds the claims hurdle, I suspect we get to go along for the ride.
>>So Waterton made a royalty deal on a property that won't generate royalties. Yeah, Uh huh.
Um, they would be the one to pay them, so yeah. You are focusing on the wrong side of the equation there bro.
>>Even looking at hollister (if true that CS got a shaft by making it accept royalties to get its debt paid back) it is sold for 110M.
What part of 90 mm being an absolute cap, a ceiling, do you not understand? It's not 90 mm of value - it's a contingent value right that is worth between zero, and at absolute best, the present value of 90 million over 9 years. But with Hollister currently losing money on production, the current value is closer to the zero side. Detach from your emotions for a second and think about the fact that Waterton won with 15 mm dollars cash and 15% of any future net profits on the asset they only put 15 mm of cash down on. Look at it the other way - to get the full 90 mm, Waterton will have to make $600,000,000 of NET PROFIT on the operation they paid $15,000,000 cash for....in 9 years or less. Good luck with that.
And the last monitor report stated definitely that 3 bids were received on Burnstone by the bid deadline - you should follow details like this more closely if you have money on the table.
I believe they got three bidders - people will take it for free....and for slightly over free. :) What would I be desperate over? You still think I'm trying to get the share price low so I can load up for the big pop? When the big pop never comes, like I've been saying it won't - only then will you realize that maybe I wasn't trying to snooker you out of shares.
I guessed 60 for Hollister and all you guys laughed it off. The NPI is hard to value definitively, but no way is it worth more than 10 to 15 mm - so I was way off with my guess. Burnstone needs major capex to deal with the geologic issues, the S. African market is struggling with Rand and labor issues, the global market for miners is more in the toilet than it was in late '08 - and you guys thinking someone is going to come along and pay half a billion dollars? (at the same time that you are vastly underestimating the remaining claims hurdle). Keep adding though.
>>Let's say 75% discount sale that puts burnstone @ 330M.
They will be lucky to get 150 in this market. eom
Yes Really.