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.
Is it time to buy coal?
Commentary: Not everything is as it seems in the coal sector
March 4, 2013, 6:00 a.m. EST
By Charles Sizemore
DALLAS (MarketWatch) — As the fracking boom has generated massive new interest in domestic oil and gas production, coal has become the red-headed stepchild of the energy industry.
Soaring new supplies of natural gas have led to a glut that has kept prices depressed for the past several years, but they’ve also pushed down the prices of energy competitors, such as coal. Coal prices collapsed during the 2008 meltdown and are still less than half of their old highs.
In an age of climate-change awareness, coal is about as politically incorrect as you can get. By Energy Information Administration estimates, coal produces 77% more carbon dioxide than natural gas for a comparable amount of energy. This is a tough sell in an era when we have abundant alternatives. Not surprisingly, coal consumption fell in the United States in 2012 and is expected to rise only modestly this year and next.
So what are we to make of this? In the age of cheap gas and environmental awareness, is coal an industry in terminal decline?
Absolutely not. Though we may associate coal with mines in America’s Appalachian region, China is most significant player in the coal market. China consumes nearly as much coal as the entire rest of the world combined, and despite being a major producer of coal for its own domestic use, China also imports massive quantities for use in the production of both energy and steel. In 2012, a year that saw anemic economic growth, China’s coal imports rose by nearly 60%.
Demand for coal among other emerging markets, such as India, is also on the rise. India is expected to overtake the United States as the second-largest consumer of coal by 2017, and its coal imports are expected to grow by well over 50% between now and then. And even in the developed world, coal consumption is on the rise in several countries, most notably the manufacturing juggernauts Germany and Japan. Worries of global warming have taken a backseat to fears of nuclear meltdowns after the Fukushima incident.
Coal’s pricing is also not as weak as the action of the past five years might suggest. Looking at the longer-term picture we see a very different story. Aside from the 2007/2008 price spike, which saw the thermal coal CAPP price soar from $40 per ton to nearly $140 per ton in a matter of months, the price of coal has been relatively stable by energy standards. Prices have spent most of the past 12 years in a fairly tight band of $40-$80 per ton.
So, is coal a viable investment theme? Judging by the performance of the Market Vectors Coal ETF KOL -1.59% , you might have second thoughts. Coal stocks have fallen by half over the past two years and have barely budged at all since June of last year. Yet coal stocks as a group trade for just 14 times rather depressed earnings, and the worst is likely over for coal pricing, as natural gas prices have shown some sign of stabilizing.
If you are pondering an investment in coal, Peabody Energy BTU -0.54% is not a bad option. Peabody has enormous coal mining operations in Australia, which now account for the majority of the company’s profits. The Australian mines are well placed to serve China’s insatiable need for coal, which should only increase now that China is showing signs of life again.
Peabody is reasonably priced at 11 times expected earnings and just 0.7 times sales. This is not rock-bottom pricing by energy stock standards, but it is by no means expensive.
Longer term, the company’s biggest risk is a true hard landing in China, not the 7.5% growth we saw in 2012 that (only in China) counts as “slow growth.”
By “hard landing,” I mean a prolonged economic contraction not unlike that experienced by Japan starting in the early 1990s. I expect that hard landing to come before the end of this decade due to the country’s aging demographics and its apparent overbuilding of infrastructure in most of the higher-income coastal regions. But in the meantime, a short-to-medium-term rebound in China should bode well for coal prices and for coal stocks such as Peabody.
Charles Sizemore manages the Tactical ETF and Sizemore Investment Letter portfolios on Covestor. He is the founder and Chief Investment Officer of Dallas-based Sizemore Capital Management LLC, a registered investment advisory firm, and editor of the Sizemore Investment Letter.
http://www.marketwatch.com/story/is-it-time-to-buy-coal-2013-03-04
_______________________________________________________________
Now add to this the fact that the coal in "La Tabaquera has 15-17 MM metric tons of mostly premium metallurgical coal [77% cleaner burning, <1% sulfur content]. The neighboring "La Herradura" is expected to have 6 times that since it's that much larger with the same coal seams."
- "Revenge is a dish best served cold."
That chapter is not closed yet.
"looks like those who held on got screwed while those who sold came out way way ahead."
I agree. The only thing I don't understand is how buying tomorrow gets you one of those highly desirable 'tagged shares' from 12/21/2011 that enables you to get the dividend on the Ex date.
You're spot on hawk! I too have felt all along that Ken's plan was about how to best reward his most loyal shareholders. Brilliant I say. He is definitely not your average pinkie CEO!
No mention of the Ex-Div date was made. He may not have been aware of this special case. Will have to reconfirm.
The way I understand it is the record date (12/21/2011) determines which shares are eligible to receive the dividend (they in effect become tagged shares). Holders of these 'tagged shares' on the Ex date (3/5/2013) get the dividend. The first business day after receipt of the dividend in your account is the first day those shares can be traded without risk of losing them.
Specifically, I asked my broker, if I buy additional shares before the Ex Date, would they also qualify for this distribution and he stated yes.
Either way, it's best to confirm with your broker beforehand.
If you purchase before the ex-dividend date, you get the dividend.
This agrees with what my broker stated yesterday.
"What does Knight have against BVIG?"
AIRSHARES!
Trap has been set, bait taken. Time to reel in.....
Nice post Mappo.
...or Ekom Eya/Noble deal,
or new South Lucky/Vale agreement (feed the monster)
or RR announcement
or financing
or ...
This next PR is 1 year+ in the making and could be a doozie.
GLTAL!
It is now very apparent why Ken hired the services of that big time WS law firm back in 2010. He didn't want a repeat of the Western Transactions fiasco. Brilliant move Ken!
- Fool me once, shame on you. Fool me twice, shame on me.
Poor choice of words on my part, my apologies. You are correct, the settlement time for trades remains at 3 days, however, with a margin account you can execute a buy using funds from a previous sell order immediately, without any additional wait time.
smc, I believe with a margin account there is no settlement period. You have to call them to set it up.
mappo, confirmed. Just spoke with my broker and he confirmed any KATX shares sold before the Ex-date would be eligible for spin-off BVIG shares as well. I smell lots of IOU's and a short squeeze coming!
Ken holding true to his word. Ken rewarding those who were faithful to him. A man who honors loyalty.
From earlier POST #64231 by renaissance man:
Being on this board makes me think of being on a plane with a bunch of people who have never flown before. They are excited to be on board but when the plane encounters some turbulence, they begin to get nervous. They are experiencing a downdraft and snow on the wing is making it difficult to control the plane. The day fliers on board begin to stir up the newbies into a panic. An old grump in the back of the plane starts complaining that its only safe to be in a plane when it's on the ground and that no one has any business flying high. A blacksmith is pounding the walls shouting, "cheaply built. She'll never hold together." A gun owner is waiving his guns in the air and telling everyone to bail out now while there's still time. A bishop is advising everyone to prepare to meet his maker, chanting we're all gonna die, we're all gonna die... And to top it off a wild monkey has gotten loose from the excess baggage department and he is running up and down the isle, jumping up and down and screaming. Some of the passengers listen to all the noise and do bail out, losing their seats forever to other greedy passengers who jump in and claim those seats for themselves, just as they planned. Others are encouraged by more experienced fliers who calm them down, advising them to remain seated and buckled up. They calmly explain that this is just turbulence and that it's not unusual on this type of flight. These are good people, steady as e rock, seasoned fliers from the UK, smart people like biochemists, patient people like fishermen, and other trustworthy people, all expressing their absolute confidence in the pilots ability to fly the plane. They know that Ken, the pilot will bring them all safely to their destination, in spite of the mms in the control tower, if they can all remain calm. And in the meantime he's doing all he can to take the plane higher, above the turbulence. The new passengers who are left sit back, still nervous but encouraged and cautiously optimistic. As they look out the window they see a birdlike man, unable to come on board but still flashing a highsign to anyone who sees him. All is well. It's quite a ride but we good. Thanks to all the positive posters.
_________________________________________________________________
Hope you're still with us Renaissance man. Looking forward to your update. WE GOOD!
Gold’s bull run not over, it’s just taking a break
March 1, 2013, 6:00 a.m. EST
By Myra P. Saefong, MarketWatch
SAN FRANCISCO (MarketWatch) — After five months of declines in gold prices, it’s still not time to call an end to gold’s bull run.
After all, the factors that contributed to gold’s fifth straight monthly decline — central-bank monetary-policy cues, economic data, currency fluctuations, asset relocation, and emerging markets — are generally the same as they’ve been for gold’s more-than-decade-long bull run.
“Many are declaring that there is no catalyst to drive gold forward,” said Jan Skoyles, head of research at The Real Asset Co., a precious-metals investment platform provider. “They’re right — the bullish drivers of gold haven’t changed at all for several years.”
“Those that pay attention to the markets know that governments embrace easy-monetary policy, they know that the euro will continue to have significant problems and they know that currency wars will continue to escalate,” she said. “That is why gold’s bearish factors, such as improved U.S. data, have greater impact on the gold prices.”
Gold futures GCJ3 +0.19% fell about 5% last month to tally a loss of around 11% since the end of September. See: Gold drops, notches fifth straight monthly loss.
An improvement in economic data out of the U.S., more recently positive figures on housing, has helped to dull gold’s appeal as a safe-haven investment.
‘The gold bull run is not over, it just doesn’t need to rush to wherever it’s climbing to.’
Jan Skoyles, The Real Asset Co.
Strength in the U.S. dollar, with the ICE dollar index DXY +0.61% climbing more than 3% in February, also pressured gold, making the metal more expensive for holders of other currencies to buy.
But bearish factors such as those won’t necessarily succeed in ending gold’s bull run, said Skoyles.
Instead, bullish factors such as the worries over the euro, easy-money policies and currency wars “will culminate in such a way that increasing numbers of investors … will turn to look for assets which are not depreciating in value and which governments cannot meddle with,” she said. A currency war refers to a competitive currency devaluation by countries trying to ease strength in their currencies. See: How gold will benefit from a currency war.
“The gold bull run is not over, it just doesn’t need to rush to wherever it’s climbing to,” said Skoyles.
Hit hard
Still, investors can’t help but question whether gold headed for more losses after its weak performance over the last several months.
“Gold was an investment as a protection against the fear of a U.S. economic collapse, hyper inflation from the [U.S. Federal Reserve’s quantitative-easing] program as well as doubt toward the leadership in Washington,” said John Person, president of NationalFutures.com.
But the dollar’s strength “appears to be from the exodus from the euro and yen,” which shows that investors “have more confidence in the potential growth and perhaps resolve to heal the U.S. economy,” he said.
A rally in U.S. stocks has also drawn a lot of attention away from gold.
“Some of the wealth that found refuge in gold has been migrating to where the public sees performance — into equities,” said Gene Arensberg, editor of the Got Gold Report.
U.S. equities climbed last month, with the Dow Jones Industrial Average DJIA +0.06% gaining 1.4%. Read more in Thursday’s Market Snapshot.
“Investors and money managers seem to be willing to forget about or ignore the massive sovereign debt issues in Europe and here in the U.S.,” said Arensberg. “They have a serious case of crisis fatigue and the Fed has juiced the economy so much it really does give the illusion that things are getting better.”
Gold futures saw an intraday record above $1,900 in 2011.
However, “The U.S. stock market is a little like the sirens in Homer’s ‘The Odyssey.’ Their music sounds so sweet, but the waters are still treacherous just ahead,” he said.
That leaves gold prices stuck in its 15-month, “post parabolic peak consolidation range” of $1,525 to $1,800 an ounce, he said, “waiting on a catalyst before the 11-year secular bull market inevitably reasserts itself.”
Gold futures touched record prices above $1,900 an ounce on an intraday basis in September 2011, according to data from the CME Group CME -0.05% .
James Turk, founder and chairman of online bullion dealer GoldMoney, said gold “remains in the correction that began after the record high it made back in 2011.”
“No one can predict when this correction will end but when it does, I expect this bull market will take gold to a new record high above $2,000 per ounce,” he said.
On the docket
As the new month begins, gold investors will have lots to consider.
“There are several key factors driving gold higher or lower in the short term,” said Edmund Moy, chief strategist with gold-backed IRA provider Morgan Gold in Irvine, Calif. Those include “central banks becoming big buyers of gold, the series of slow train wrecks that have become hallmarks of our fiscal policy, the [European Union’s] faltering economy and retail buying from India and China.”
In February, a lack of gold purchases from China in the midst of its Lunar New Year celebrations had put a temporary drag on prices, while an election in Italy that resulted in a political gridlock renewed worries over the euro zone and raised the metal’s safe-haven appeal.
Investors will be eager to hear about the pace of Chinese buying in the following the temporary holiday slowdown as well as any musings from Europe, and further hints from the Fed about its plans for QE — so March will see much of the same influences as last month.
The steep U.S. spending cuts set to begin later Friday have also taken the spotlight of late. See: The sequester starts Friday. Then what?
And those cuts, known as the sequester, may ultimately feed a rise in gold prices.
“In all my years in DC, I have never seen such a poor relationship between Congress and the White House,” said Moy, adding that, “There is little hope for any meaningful reduction in government spending.”
“Our deficit will continue to increase the national debt, and the national debt ceiling will continue to rise,” he said. “This means that gold prices will continue to rise in the long term.”
Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong.
Gold Bullion And Miners' Race To The Bottom
Mar 1 2013, 04:40 | 1 comment | includes: GDX, GDXJ, GLD, IAU
Since equities reached bottom in June 2012, major indices have rallied 21% to today, compared to -1% for gold bullion and -20% for the Gold Bugs index – an index of the 16 most popular gold mining companies.
The Gold Bugs index has fallen 31% from its September high, while the yellow metal dropped 13% from its October high. A similar 2.5-1 disparity in the Gold Bugs-bullion sell-off was seen during the 2008 crisis, when bullion fell 33% from its 2008 peak to its 2008 trough, while Gold Bugs fell 71% during the same period.
And for an idea about the extent to which gold has outperformed gold miners, the price of bullion is now more than four times the Gold Bugs ratio, the highest in 12-year highs, nearly doubling from its 2011 lows and breaking above the highs from 2008.
Over the years, many investors have preferred miners over bullion with the rationale that stocks carry intrinsic value of capital appreciation, dividends, management performance and the potential of positive rates of returns exceeding cost of capital. But miners have delivered their share of disappointment. Underestimating cost overruns, the inability to contain soaring production costs and over concentration on boosting output to chase rising price of bullion have proven damaging to share prices. Multibillion-dollar takeovers in the red and labour unrest in Africa have also delivered their share of force-majeure risk to the very asset which was meant to hedge against risk.
Gold's outperformance relative to miners stemmed from investors seeking capital gains in bullion as central banks' quantitative easing sent yields plummeting and boosted inflation expectations. Recurring market panics on Europe and the periodic delaying of budget resolutions by US Congress have also maintained support for precious bullion.
But gold is now getting all the wrong attention amid commodity funds selling their multi-year holdings and the breakdown of key technical dynamics hit the headlines:
Gold's 55-day moving average broke below the 200-day moving average;
Gold is posting its first back-to-back quarterly decline since 2000;
Gold breaking below its 100-DMA for the first time since 2008;
and soon (possibly but not yet in the headline), Gold's 55-WMA may fall below the 100-WMA for the first time since…2002.
Gold's next downside target stands at 1520-25, a break of which may further trigger stops of CTAs and black box positions. A print of 1500 is seen as almost synonymous with the road to 1330, which may well become the trigger for the Gold-Gold Bugs ratio to peak and chart its next descent.
Comments (1)
BORNAGAIN2007 Comments (188)
While your statement "Gold Bullion And Miners' Race To The Bottom" is true, market valuations in this space have never been better. Below are just 5 of the many reasons that one could site that demonstrate miner valuations are dirt cheap.
1. Dividends of gold miners now better that 5 year treasuries in almost all cases.
2. Most gold miners now trading at forward P/E ratios in the single digit range.
3. Many gold miners have projected production growth rates of double digit over the next two (2) years.
4. Many gold miners with by-products (CU, ZC, MB, LD, etc.) are priced at levels that value gold in the ground at or near $0 per ounce when by-product credits are considered. Exploration programs for many miners are not only replacing reserves, but these same exploration programs are growing reserves. As an example, NEM has many billions of pounds of copper in the ground.
5. Cash flow growth for gold miners is significant and growing even at a $1.500 / oz gold price. Cash flow metrics for the larger miners is in the Billions of dollars.
Blackbox trading and HFT coupled with technicals are setting up the entire system for a day of financial armageddon. Market is clearly irrational and the world is in denial about inflation because of manipulated government statistics. Gold price within the last 60 days hit an all time high in YEN terms. Gold all time high in dollar terms cannot be far behind. Today, for example, it can be shown that fair market value price for gold is above $2,000/oz using ShadowStats inflation model.
The dollar for all intents and purposes is finished because of the inability of the USA to deal with debt challenges in a credible way. Today, the USA has nothing more than a TAX, BORROW and SPEND fiscal policy. It is not a question of if, but when.
One final comment is a quotation from an ancient book that is true about firms engaging in HFT and blackbox trading:
"Professing to be wise, they became fools."
__________________________________________________________________
I posted this article primarily for the rebuttal to the manipulation that is going on in the media. A strong case for miners & explorers IMO.
http://seekingalpha.com/article/1237951-gold-bullion-and-miners-race-to-the-bottom?source=yahoo
"....WHETHER YOU ARE A PUMPER OR A BASHER"
Respectfully, you are forgetting the third class of poster who is neither pumper nor basher but simply wishes to uncover the facts.
Michi, They are dated from 2011.
The main road between the mine at Guaduas and Rio Magdalena is a very mountainous region of the country that was washed out due to mudslides over 1km+ distance during the severe flooding of 2011. Local businesses and transportation of goods in the area were severely impacted. Alternate routes are dangerous and unstable. Any updates on the current status of the roads?
http://www.panoramio.com/photo/51512550
http://maps.google.com/maps?hl=en&sugexp=les%3B&gs_rn=5&gs_ri=psy-ab&cp=5&gs_id=p&xhr=t&q=guadua&bav=on.2,or.r_gc.r_pw.r_qf.&bvm=bv.43148975,d.eWU&biw=1035&bih=631&um=1&ie=UTF-8&sa=N&tab=wl
BEWARE, MCET listed as P&D!
http://www.pumpsanddumps.com/p/pumpsanddumpscom-hall-of-fame.html
Just say'n.........
Doubloon, when you talk with John Campo next, inquire about lack of infrastructure, particularly transport to Rio Magdalena and associated plans to construct. Will the Colombian government be providing assistance?
Ha, that would be nice, LOL.
Actually, I do hope I see that backlash of legitimacy, I'm all ears!
Makes for better DD. ;)
I'll admit, you have a great looking chart and I've been watching this, but it's a jungle out there. Let me also preface by saying I don't own any here. I just ran across this site and thought I'd give a cautionary heads-up. The site appeared to me to be somewhat legit. I hope you're right, GLTU.
BEWARE, MWIP listed as P&D!
http://www.pumpsanddumps.com/p/pumpsanddumpscom-hall-of-fame.html
Just say'n.........
np VOR, happy to assist. I see you've already done your DD, nice.
BEWARE, SOLX & BTHR listed as P&D!
http://www.pumpsanddumps.com/p/pumpsanddumpscom-hall-of-fame.html
Just say'n.........
BEWARE, BTHR listed as P&D!
http://www.pumpsanddumps.com/p/pumpsanddumpscom-hall-of-fame.html
Just say'n............
For all those here claiming KATX is a P&D...........
Symbol Start Date of Pump & Dump Campaign
KATX 05-10-11 1t
~d Number of Days Promoted
+7d Promoted for more than 7 Days (older records)
-7d Promoted for less than 7 Days (older records)
~t Minimum Number of Touts (Newletters) Emailing
Symbols in RED Have Been Subject to Illegal Spam Emails Campaigns
http://www.pumpsanddumps.com/p/pumpsanddumpscom-hall-of-fame.html
Just say'n.........
BEWARE, SOLX listed as a P&D!
http://www.pumpsanddumps.com/p/pumpsanddumpscom-hall-of-fame.html
Just say'n....
I must respectfully disagree. Shareholders are the last to get paid and IF they do it is rare. I just went through this in a bankruptcy court case. The attorneys usually suck the well dry long before anything trickles down to shareholders. One only has to read the fine print in any company prospectus to see the risk lies with the investor.
"the lenders do not like to 'foreclose' on an asset..they will also make sure that the company management is competent...so that the end result is...EVERYONE GETS PAID..including the shareholders.."
xzx, it would appear you are correct. From 8-K General Instructions (filing requirements):
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
(a) If the registrant becomes obligated on a direct financial obligation that is material to the registrant, disclose the following
information:
(1) the date on which the registrant becomes obligated on the direct financial obligation and a brief description of the
transaction or agreement creating the obligation;
(2) the amount of the obligation, including the terms of its payment and, if applicable, a brief description of the material terms
under which it may be accelerated or increased and the nature of any recourse provisions that would enable the registrant to recover
from third parties; and
(3) a brief description of the other terms and conditions of the transaction or agreement that are material to the registrant.
(b) If the registrant becomes directly or contingently liable for an obligation that is material to the registrant arising out of an offbalance sheet arrangement, disclose the following information:
(1) the date on which the registrant becomes directly or contingently liable on the obligation and a brief description of the
transaction or agreement creating the arrangement and obligation;
(2) a brief description of the nature and amount of the obligation of the registrant under the arrangement, including the
material terms whereby it may become a direct obligation, if applicable, or may be accelerated or increased and the nature of any
recourse provisions that would enable the registrant to recover from third parties;
(3) the maximum potential amount of future payments (undiscounted) that the registrant may be required to make, if different;
and
(4) a brief description of the other terms and conditions of the obligation or arrangement that are material to the registrant.
(c) For purposes of this Item 2.03, direct financial obligation means any of the following:
(1) a long-term debt obligation, as defined in Item 303(a)(5)(ii)(A) of Regulation S-K (17 CFR 229.303(a)(5)(ii)(A));
(2) a capital lease obligation, as defined in Item 303(a)(5)(ii)(B) of Regulation S-K (17 CFR 229.303(a)(5)(ii)(B));
(3) an operating lease obligation, as defined in Item 303(a)(5)(ii)(C) of Regulation S-K (17 CFR 229.303(a)(5)(ii)(C)); or
(4) a short-term debt obligation that arises other than in the ordinary course of business.
(d) For purposes of this Item 2.03, off-balance sheet arrangement has the meaning set forth in Item 303(a)(4)(ii) of Regulation S-K
(17 CFR 229.303(a)(4)(ii)).
(e) For purposes of this Item 2.03, short-term debt obligation means a payment obligation under a borrowing arrangement that is
scheduled to mature within one year, or, for those registrants that use the operating cycle concept of working capital, within a
registrant’s operating cycle that is longer than one year, as discussed in Accounting Research Bulletin No. 43, Chapter 3A, Working
Capital.
Instructions.
1. A registrant has no obligation to disclose information under this Item 2.03 until the registrant enters into an agreement enforceable
against the registrant, whether or not subject to conditions, under which the direct financial obligation will arise or be created or
issued. If there is no such agreement, the registrant must provide the disclosure within four business days after the occurrence of
the closing or settlement of the transaction or arrangement under which the direct financial obligation arises or is created.
2. A registrant must provide the disclosure required by paragraph (b) of this Item 2.03 whether or not the registrant is also a party
to the transaction or agreement creating the contingent obligation arising under the off-balance sheet arrangement. In the event that
neither the registrant nor any affiliate of the registrant is also a party to the transaction or agreement creating the contingent obligation
arising under the off-balance sheet arrangement in question, the four business day period for reporting the event under this Item
2.03 shall begin on the earlier of (i) the fourth business day after the contingent obligation is created or arises, and (ii) the day on
which an executive officer, as defined in 17 CFR 240.3b-7, of the registrant becomes aware of the contingent obligation.
3. In the event that an agreement, transaction or arrangement requiring disclosure under this Item 2.03 comprises a facility, program
or similar arrangement that creates or may give rise to direct financial obligations of the registrant in connection with multiple
transactions, the registrant shall:
(i) disclose the entering into of the facility, program or similar arrangement if the entering into of the facility is material to
the registrant; and
(ii) as direct financial obligations arise or are created under the facility or program, disclose the required information under
this Item 2.03 to the extent that the obligations are material to the registrant (including when a series of previously undisclosed
individually immaterial obligations become material in the aggregate).
4. For purposes of Item 2.03(b)(3), the maximum amount of future payments shall not be reduced by the effect of any amounts that
may possibly be recovered by the registrant under recourse or collateralization provisions in any guarantee agreement, transaction
or arrangement.
5. If the obligation required to be disclosed under this Item 2.03 is a security, or a term of a security, that has been or will be sold
pursuant to an effective registration statement of the registrant, the registrant is not required to file a Form 8-K pursuant to this Item
2.03, provided that the prospectus relating to that sale contains the information required by this Item 2.03 and is filed within the
required time period under Securities Act Rule 424 (§230.424 of this chapter).
http://www.sec.gov/about/forms/form8-k.pdf
Notice there is no percentage of the O/S stated as a triggering event for the 8-K filing, only that it is "material to the registrant". Any long term or short term debt obligation as defined above must include an 8-K filing.
One thing that concerns me is the tightened environmental regulations since the Deep Water Horizon incident and how that may impact us here.
Whoaaaaa, you've covered a lot of ground there. Many i's to be dotted and t's to be crossed between the lines in order for all that to happen, any one of which could derail this whole operation. One step at a time.
I've experienced that myself several times with a start-up under the guidance of a big time NYC law firm specializing in securities.
dlk, I appreciate your insight. EOM
Sounds reasonable to me. I think a little patience is required here, would not want to miss out on a golden opportunity. Certainly worthy of a small position, at least for now, IMO.
Relatively speaking, the O/S is still pretty low compared to other pinks and when others raise the O/S, they do it in grand fashion, not poco-to-poco.
This is one shrewd CEO we're deal'n with here.