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Have you been keeping copies of the holdings everyday Dano? If the redemption trade is the mechanism by which GBG shares are coming out, wouldn't it be pro rata with the rest of the companies in the basket? Has crocodile gold for instance had the same decline? Or am I not understanding this right....still seems like Van Eck needs a different mechanism to be getting rid of GBG at the rate they have been. How do they do it when the underlying index is altered and one stock is replaced by another? Through the APs or does the ETF do it directly? Tia
The name of Johnson Controls is now popping up in the Valence docket. The case appears to be taking some sort of turn as the company is now motioning to hire KPMG and Roth Capital to act as agents for an equity raise. What I find most interesting is that Johnson Controls, plus a few others, are listed in the engagement letters as parties for whom KPMG and Roth would only be eligible for half of the 2.5% commission that would be applicable for new money. Have to guess that when JC lost the A123 IP they approached Valence, and now Valence has initiated an equity solicitation process that did not previously seem to be part of the plan.
They are only now hiring agency to raise equity...essentially the list we see in the engagement letters would be parties that approached Valence unsolicited. I love that Johnson Controls is on that list. JC bid around 120 mm for the automotive business of A123....not for all of A123. They didn't get it. A Chinese competitor did....do you think they want battery IP more or less than before they lost that auction? I had mostly given up on this. Looked like Berg had handpicked his valuation expert and could easily pull a KMart and lowball the IP below the claims hurdle, taking the whole shebang. But when letting new money in, that same lowball valuation now means that Berg is screwing himself more than outside equity. Again, maybe the IP isn't worth the claims hurdle....but I think it might be, and it's really quite surprising to see this case take this turn now. It wasn't contemplated at the outset of the case, at least it surely didn't appear to be. So what changed? I can think of a couple scenarios. This case may get interesting yet.
The KPMG engagement letter is up. Terms include 2.5% of any proceeds raised, with a minimum fee of 500k - this suggests that 20 mm is the ballpark they are looking for. Interestingly, money raised from SAIF, Entertech, VIA Motors, or Johnson Controls is only eligible for 1.25% success fee, which suggests there are tirekickers already - not at all surpised to see JC on that list given their failed attempt to snag A123. Still a longshot, but the fact that the company is looking to raise that sort of money, and it's indicated as equity - it keeps the valuations much more honest than Berg would have to be if he was just going to take it all for himself and raise money post exit. The unsecured creditor committee may have had some influence here - hard to tell - from what I've seen they've shared the same concern that equity has due to Berg's rather unrestrained influence in the case.
Interesting Dano....many thanks for your diligence.
I like GBGLF more. School Specialty is interesting - but I think moreso via the convertible debt. The ops are valuable, and Bayside clearly wants it for themselves on the cheap. The unsecureds will fight this, and I think they have a great case, most especially as they seem like they might bring the $$$ to the table to take out Bayside. But I think those unsecureds are then going to take it for themselves, and leave equity out. I found this language in docket item #177 not completely reassuring:
14. Prior to the Petition Date, the Debtors engaged an “ad hoc” committee of
Unsecured Noteholders (the “Pre-Petition Ad Hoc Committee”) in work-out and bankruptcyplanning
discussions. As part of those discussions, the Debtors provided the Pre-Petition Ad
Hoc Committee certain analyses, reflecting restructuring scenarios and outcomes anticipated by
the Debtors.3 None of those scenarios reflect zero distribution for unsecured creditors.4 To the
contrary, every one of the Debtors’ scenarios contemplated all of the reorganized company’s
equity being delivered to unsecured creditors.5
15. The Debtors’ proffered “illustrative” valuations ranged from approximately $198
million to $265 million, assuming blended multiples ranging from 4.5x to 6.0x and (what now is
an outdated, low) EBITDA of $43.9 million.6 Based on FY2013 projected EBITDA of $47
million, the Debtors’ “illustrative” model suggests a valuation range of $210 million to $280
million. With only approximately $140 million in alleged pre-petition secured debt7 and
anticipated post-petition borrowings of around $50 million, the Debtors “illustrative” valuation
range implies unsecured creditor recoveries perhaps near $100 million. The Committee may
come to conclude that even this estimate is greatly understated, once it has had an opportunity to
diligence data and model further.
3
Hadn't seen this posted to the board here.....not sure when it was uploaded to Great Basin site - it's the minutes of the 1/30/13 BRP creditor meeting. Only real nugget in there relates to confidence given that bidders are 'well known'.
http://www.greatbasingold.com/businessrescue/meetings/CreditorsMeeting_30_January_2013.pdf
Let's have a buyers strike above a penny - if Van Eck is going to clear their deck, let's make it a spectacle to behold.
Just pulled up the docket for the first time in a month. I see motion to retain KPMG Corp Finance and Roth Capital as investment bankers to the debtor. I was largely figuring that Berg would do the exit financing and thereby control the entire valuation process. Based on the success fee, it looks like they will be looking for something north of 10 mm. To my way of thinking, this makes it interesting again - provided the IP is as good as claimed - as outside, arms length money of that size will in essence put a value on the IP. If it ain't worth crap, it ain't worth crap. If some outfit like Johnson Controls that couldn't get it's hands on AONE IP has an interest in the IP here, it could well serve to keep everyone with a seat at the table more honest. Any word on what happened to the ad hoc equity committee?
Van Eck is sitting on the ask and everyone and their brother knows it - until they work through their holdings, we kinda mostly stuck I think. I was so hoping they would recklessly blow those 68 mm shares out and take the pps deep into sub penny land.
Priceless
>>OBQI is one example.
Are you sure about that? You can look at Arctic Glacier too.
Sandstorm is a streaming company - they 'loaned' MTO 20 mm about 2 years ago - money that was needed to get the mine to the point of production, and in exchange, they get to buy 20% of production for $500 an ounce. 20% is a lot to give away, but had it been true debt, MTO may not have made it this far. Sandstorm has a steller rep - one of the reasons that I bought in here two years ago was because that Nolan guy at Sandstorm is highly regarded for doing his due diligence.
>>But 5 million shares in regards to the 80 or so million trading since it opened back up doesn't seem like much
5 mm was yesterday - they've dropped 20 mm shares at Van Eck since it reopened last week.
First time visiting the Metanor board on IH....Cork, had no idea you liked this one. I've met Ron and Gessie several times over the last 3 years. I think they might actually be close to getting it done this time. They caught a huge break when Richmond had to close the neighboring mine a few months back - they picked up the skilled underground labor that was otherwise going to take much longer to round up.
edit (and Ron managed to get Metanor on the front page of the Northern Miner the week of the Cambridge House Vancouver show. They had a very busy booth this year. Jay Taylor was there when I dropped by)
>>So let's say 5 million shares sold...I wouldn't consider that dumping or having an effect right now...maybe I am missing something?
Volume was 10 million yesterday....and one fund family sold 5 mm....and you don't think it had an effect - sometimes the effect is what we don't see happen. Call it dumping or call it liquidating a non-conforming holding - Van Eck is clearly and demonstrably selling massive quantities of shares on a daily basis - and it will continue until they are out.
I think I'd like to get to 3....and I've gone from zero to 1.995 mm since trading resumed.
I thinks it's bullish that Van Eck can dump that many shares and we can still have the pps close green yesterday. We know Van Eck can't keep these shares in the ETFs for technical reasons. The shares are slogging through massive, day after day, relentless pressure, I view that positively in light of the obvious primary source of shares, until they run out.
That's a nice one day clip given the volume. I'm thinking that reflects yesterdays trading, but I agree it's confusing the way it's shown. Looks like we have another 2 weeks of Van Eck overhang at this pace.
>>you got 26 million number - that is probably where it was
I'm not sure about that - sec filings indicate that Van Eck purchased a lot of shares in the middle of '12 - but they could have shares in other places at the firm as well. At this point, like you say, we can monitor at least a good portion of their daily activity on a go forward basis. I was hoping to try and get a better handle on some of where the last 5 days volume was coming from. I'm sure there is more than just Van Eck who would like GBG off their books for other than the fundamentals of mine value vs claims hurdle right now. Once that overhang gets ground through, this should get to be less like watching paint dry.
Google cache got me the 1/25/13 version of the page - but the link to the daily spreadsheet isn't part of the cache - dang it.
Playing around on the wayback machine - but last cache of the GDX page was 6/04/12 - from that I was able to pull the all holdings spreadsheet as of that date - they held 19,560,658 in that fund on that date - but it's hard to tell what may have happened between 6/04 and the trade halt. Anybody know another way to pull up prior days on the spreadsheet?
nice work finding the other chunk dano.
It is indeed updating daily - learningthetruth - your cut and paste of 2/05 showed 78 Great Basin Gold GBG US 34,444,262 $499,441.80 0.02%. The version I just pulled is indicating 2/06 and shows 33,474,657 - so they basically only got rid of a million shares from this particular fund yesterday - again, we aren't getting visibility into the other 26 mm shares elsewhere at Van Eck. I gotta bookmark this page and keep tabs on what they are doing with their Crocodile Gold and Gran Colombia -both of those trade very distressed - not like GBG distress. Thanks again for finding this.
http://www.vaneck.com/funds/GDXJ.aspx
So I found the link that is the source of those numbers. (I could see it before but my IPAD couldn't open it) It comes in the section of top 10 holdings - so when it says 'all fund holdings' - they mean beyond the top 10 - not all Van Eck funds. So it looks again like the Van Eck fund that had 42 mm per the SEC filing in Nov is down to 33 mm. Van Eck had another 26 mm shares in other places at Van Eck - I still think they have to file a 13G as of 2/10 that may give more insights - and I think its possible this link above that was found might possibly update frequently? Maybe daily since it's an ETF.
Well, I see what was posted here says 'all funds'....can't find the link this was pulled from on google when I click through, not sure what I'm doing wrong. Maybe they are halfway through.
Just went back to review the 11/02 filing with SEC thinking Van Eck could be holding shares in more than one vehicle. Indeed, they do break out that the market vectors fund was only holding 42 of their 68 mm total....so we still know they are selling, but harder to gauge how much has been pushed out the door. What is interesting is that VE was adding shares all the way into the halt. Makes me think dumping now is simply ties to CCAA status and not any fundamental merits.
We know than Van Eck has dumped 34 mm shares in the last week - based on the last SEC filing from late '12 that showed them holding 68 mm shares. Van Eck being a public fund can have very different motivations for selling. I'd been thinking these size of some of these prints pretty much indicated that Van Eck was liquidating, but this would appear to confirm it. I take it as very bullish for what happens when that overhang is removed.
Nice find. So it has been them and they were about halfway through. Very interesting.
I'd speculate they are more sensitive to time than price given the absolute arse whoopin they've taken....folks would buy at .02, but not quite like they do at .015. 68 million shares is a lot to get through.
I think we might get our answer - at least a partial answer - as to Van Eck by 2/10. If you look at very last sentence of 2nd paragraph below - amendments to 13G are required after 10th day after close of month for passive holders holding in excess of 10% - and as of Dec '12, Van Eck was over 10%. That will probably be the last time they are required to file, but at least we'd by and large have confirmation of what the largest holder is doing - assuming they started liquidation in those final days of Jan - and it's really hard to imagine given the size of some of those large prints that went through back to back to back that it wasn't the 70 million share holder involved. I'd also think that a 70 million share holder - 68 mm, whatver - is relatively price insensitive down here - at .015 you get 1 million, at .005 you get 350k - relative to what was put in here - that delta is not very material - I'd think the manager is focused on putting as much distance as humanly possible between GBG and his quarterly investor disclosures - after all, it's not like it's the managers' money
What is required under Section 13(g)?
Section 13(g) is very similar to Section 13(d). However, the requirements of Section 13(g) are less burdensome because Section 13(g) is designed to require reporting by qualified institutional investors and passive investors which do not raise the types of concerns underlying Section 13(d). Under this section, reporting entities must file Schedule 13G, which is very similar to Schedule 13D but requires less information and, in most cases, must only be updated on an annual basis. Schedule 13G must be filed when a qualified institutional investor exceeds 5% of a class of outstanding registered equity securities provided they hold the securities due to their normal course of business and not to affect change or influence control of the issuer. Schedule 13G is actually combined with Schedule 13D.
An investment advisor registered with either a state or the SEC could be considered a qualified institutional investor and more likely subject to Section 13(g) as opposed to Section 13(d). A passive investor would be a person or entity that trades for its own account and does not fall within the definition of qualified institutional investor, e.g. broker/dealer, investment advisor, or insurance company. Schedule 13G must be filed within 45 days of the end of the calendar year in which the qualified institutional investor exceeds the 5% threshold. Going forward, amendments are required on an annual basis. Amendments are also required within 10 days after the end of a month in which beneficial ownership exceeds 10% or more and within 10 days after the end of a month when ownership increases or decreases by at least 5%.
I'd say that the Van Eck Funds are unloading their position - from going through various insider reports - nobody else out there could fill orders the way we've been seeing this past week. As a fund house open to the public, probably in their charter to get out once CCAA gets invoked. Once you get a seller with 80/90 mm shares that have to go off the ask, I think we could see a little less snoozefest here - I really can't come up with any other explanation for hugging such a tight range - and I think that tight range also suggests two large buyers interested in those shares, otherwise this would be going sub penny - where I really sorta hoped it would go with so many shares out.
Haven't see the report you mentioned dano, but I'll keep an eye out for it. I do like miningmx - came across it a few days ago doing dd on GBG - need to go back and spend some time on that site for other holdings.
I love bankrupt companies and I love gold miners - I can't not get involved with GBG - if you look around, gold miners have not by and large gone bankrupt in years. Tri-Valley had two gold properties, but they were mainly an oil/gas play. There was that other one - lost canyon? Something canyon. I forget the name, but there was plenty of controversy because of proximity to a military base and Chinese bidders. State Dept nixed the deal for national security reasons. You have public companies trading at 10 oz in the ground, and companies trading at 300 oz in the ground. I was looking at a report the other day that listed Burnstone as the the 19th largest resource in the world. What is that worth? In this crazy world we live in - it is worth what the most deep pocketed bidder is willing to pay - and that is an unpredictable range.
dano9008 - excellent points. On the GBG website, there is a letter from the BRP to the creditors dated mid January that is excellent read and squares with your comment that the BRP is motivated to find the value for the parties in interest. The letter indicates that there a few interested bidders involved in the process right now...and that he doesn't expect to report a deal until May. That amount of time suggests to me he expects a lot of back and forth between the interested suitors to do back and forth on price. So probably WITS is in there, and I too can't image a Chinese sovereign backed entity viewing this as a great source to feed China's appetite for gold reserves for their currency. While I agree in theory that the auction route for both properties diminishes the potential value compared to reorganizing, my experience in bankruptcy over the last 10 years is that in practice, reorganization usually provides and easier format for the lenders to snatch that value away from equity - you simply hire an IB to value the project below the claims hurdle and take it all - in the US the term is called 'K-marting the Court'. I don't know that I'd have much interest in GBG at this point if it wasn't going the route of auction on both properties, because it keeps everyone with a seat at the table honest (and equity does not have a seat without an EC, which I don't think is even allowed in Canada)
another 2,000,000 share print at .015 just hit the tape at 16:13
Yeah, the last 10 to 15 minutes was very heavy in general. My take is that the volume is coming from sellers, but it is being well absorbed at .015....at least for now. Hell, I don't mind it getting run down though.
from Jan 9 letter by BRP to creditors (not sure if this was posted a few weeks ago). Looks like it could be May 31 before we hear much - I like that - the longer it takes, the better it normally is, assuming you have multiple bidders to start with, as indicated in the letter (and as one should expect from a 20 mm oz deposit)
3. That said, the sale process is now underway and there are several interested parties. I remain of the view
that the prospects of a successful rescue are good. Once a final binding offer has been secured, I will be
able to prepare and publish a business rescue plan for consideration by all affected parties. I think it is
likely that such an offer will be secured by end March and therefore seek an extension from you, in terms of
section 150(5) of the Act, of the time in which I have to publish a business rescue plan from 15 January
2013 until 31 May 2013. If the offer and acquisition conditions that will influence the business rescue plan
are achieved sooner than this, I will notify all affected parties of an earlier publication date.
big 1,750,000 print at .0151 - not huge in dollars but still a large size print in shares - big enough to suggest a large holder is trying to get out - wonder if Van Eck can hold bk shares - they did appear to buy all the way into the halt based on the filings I posted earlier today.
Thanks siouxlookout - I was just trying to find card for guy at CNSX to ask what happens to Canadians when this happens. I'd assume Canacord and Salamon etc accounts would work the same? I feel a little relieved to know those shares have at least been available to hit the market the last few days.