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Scorpio Mining and U.S. Silver & Gold Announce Business Combination to Create a Well-Funded Junior Silver Producer
TORONTO, Nov. 7, 2014 /CNW/ - Scorpio Mining Corporation ("Scorpio Mining") (TSX: SPM) and U.S. Silver & Gold Inc. ("U.S. Silver & Gold") (TSX: USA) are pleased to announce that they have entered into a definitive agreement (the "Agreement") to complete a merger of equals that will combine their respective businesses (the "Transaction") to create a leading junior silver producer in the Americas.
The combined company will continue under the name of Scorpio Mining Corporation and is positioned to have a strong operating platform with two established producing mines, a third mine in development, an advanced stage exploration project, and pro forma net working capital of approximately C$40 million (including approximately C$21 million in cash)[1]. In addition, the combined company will be led by a highly experienced management team and Board of Directors that will focus on efficiently executing a combined business plan, further reducing costs and optimizing operations given current market conditions and evaluating accretive growth opportunities.
Under the terms of the Transaction, which will be effected by a statutory plan of arrangement, shareholders of U.S. Silver & Gold will receive 1.68 common shares of Scorpio Mining for each share of U.S. Silver & Gold held. Shareholders of Scorpio Mining will not have to exchange their shares of Scorpio Mining in the transaction. Upon completion of the Transaction, the combined company will have approximately 335 million common shares outstanding, of which former shareholders of Scorpio Mining will own approximately 59% and former shareholders of U.S. Silver & Gold will own 41%. The Transaction values the combined company at C$65 million on a basic basis.
http://www.newswire.ca/en/story/1442425/scorpio-mining-and-u-s-silver-gold-announce-business-combination-to-create-a-well-funded-junior-silver-producer
U.S. Silver & Gold Inc. (USGIF: OTCQX International) | U.S. Silver & Gold and Scorpio Mining Announce Business Combination
http://searchingwallstreet.com/u-s-silver-gold-inc-usgif-otcqx-international-u-s-silver-gold-and-scorpio-mining-announce-business-combination/
http://www.mining.com/u-s-silver-and-scorpio-mining-merge-to-create-leading-junior-silver-producer-42446/
Mexican-focused silver producer, Scorpio Mining (TSX: SPM), merged with U.S. Silver & Gold (TSX: USA) to create a silver producer focused on the Americas and better survive low precious metal prices.
The entity will stay under the name Scorpio Mining. The new junior silver miner will have two established producing mines, a third mine in development, an advanced stage exploration project, and pro forma net working capital of approximately C$40 million.
Scorpio Mining's stock was halted today pending announcement of the news.
"This merger creates a stronger, better positioned company that is capable of not only surviving the current low silver price environment, but potentially transitioning from a junior precious metals company to an intermediate producer over the next couple of years," stated Darren Blasutti, President and Chief Executive Officer of U.S. Silver & Gold, in a statement.
Management believes a larger company will be able to realize efficiencies and save the combined company approximately C$2.0 – C$3.0 million per annum.
The news release stated that merging the companies will ". . . create a leading junior silver producer in the Americas."
First, Russia dumped record amount of US treasuries this year. They replace US paper part of country’s foreign exchange reserves by gold. Actually, it could be a right move (long term) if one believes that US treasuries are in the bubble and gold price is close to the bottom. Besides, they are afraid that due to the new sanctions Russia will be unable to sell its USD reserves in future.
Second, Russia buys most of the gold from domestic producers who, according to Russian laws, cannot sell it on the open market without CB authorization. Basically, they just move own gold production into Central Bank. Many totalitarian governments (China, Venezuela, etc.) do the same – buying up all domestic gold. Of course, this is still bullish for gold prices because it removes some supply from the market. OTOH, at some point, after all foreign currency reserves are exhausted; Russia will be forced to sell its gold to support domestic economy. That’s what Soviet Union used to do just to feed its population.
TECHNICAL SCOOP CHART OF THE WEEK:
and interesting comment:
http://news.goldseek.com/GoldSeek/1415290500.php
I think most comments on “gold price manipulation” are too US-centric. One point nobody mentions: USA is basically in a new cold war with Russia now. This war will get only “warmer” after Republicans took control of Senate. Commodities, especially oil and gold, are main weapon that America is going to use in this war. With current downtrend in oil price Russia’s economy will crash in 1.5-2 years. They already using currency/gold reserves to support falling ruble and fight inflation. According to recent reports, Russia’s currency/gold reserves fell to 5-year low $439 bln (2.5% loss just last week). I saw somewhere that US' plan is to reduce oil spot to $60-65 in 2 years, and OPEC is OK with this target. What would be the price of gold if oil hits $60? Is this manipulation? Sure. But maybe it’s better than “nuclear manipulation” from both sides? IMO.
Another problem with APMEX: a couple of years ago they bought from Donald Trump office building in Manhattan. It was a famous "gold for bricks" transaction. They got a lot of publicity and media attention, but... unexpected side effect: now they have to charge sales tax 8+% to all NY residents. New York, California and Texas are the biggest PM buyers, and APMEX basically lost NY market. So, buyers from other states have to pay for this loss.
Long list and analysis of medical marijuana stocks:
http://www.stockhouse.com/news/newswire/2014/10/27/medical-marijuana-update-geonovus-bed-with-affinor-as-abattis-goes-to-war
"PMX Communities (OTO:PMXO, Stock Forum) has been up and down like a yo-yo this last week, with big double digit ups and downs. Why? Well. That company has announced a new product – the Vacationer Box.
The deal with this is, if you’re flying to Colorado for a big phat smoke, you order one of these ahead of time and you’re met with a box of smoking equipment when you get there; vaporizers, pipes, papers, screens, etc., all served from a vending machine.
Since Colorado, to this date, hasn’t allowed actual weed in vending machines, this is PMXO’s workaround while it waits for rules to change. Hopefully."
Yes, this is a possibility. Somebody may be interested in merging with publicly traded company. You've just presented to management an excellent idea. They actually borrow some topics from the message board. I remember the bitcoin idea was discussed here first and then popped up in PMX PRs.
Actually, this is indirect proof that they are ready to announce some positive news... Supposedly (they hope) this will be followed by big trading volume that will cover coming dilution. Just normal pinky scenario which eventually leads to reverse split. IMO.
Interesting article:
https://www.bullionvault.com/gold-news/shanghai-gold-091720144
"China's inability to export gold bullion puts a big block on it affecting world prices. Because while metal is drawn into China when domestic prices rise above London quotes (the so-called "Shanghai gold arbitrage" trade) it cannot flow the other way when Shanghai goes to a discount. Traders can only exploit the price-gap in one direction."
I actually think it doesn't make much sense to compare London/NY paper prices to Shanghai physical gold price. It's not really an arbitrage opportunity. OTOH, "paper" gold does affect retail prices in USA. Today you can buy small pieces of metal from US dealers well below $1,300. So, either retail price for physical gold should go up in USA, or SGE will adjust its valuations down. IMO.
Troy oz is 31.1 g Are all of your price targets based on "regular" oz?
Somebody needs to tell Meris that according to SEC rules her mumbling on twitter is an official way to communicate with shareholders just like company's PRs. It's really annoying to read those teenage chat room style "messages". How is she going to cite them when she is brought to court by shareholders?
Just one remark... Mark and Meris don't really need higher PMXO prices to be "able to sleep". Mark Goldstein bought his initial 33 mln shares at 0.00176 (almost 10 times cheaper than current price). Also, every time we hear that PMX borrowed some cash from "major investor" it means that Mark invested another couple of thousands into short term "promissory notes" and will be paid back by cheap PMXO shares (5+ mln shares at 0.01 last year). He didn't hesitate to sell them last time. So, assuming that PMXO is a failing enterprise (which may or may not be correct) all this "founding family" needs is a trading VOLUME to be able to get out. They don't need any rally. They are deep in the green already.
IMO.
I am glad you made some money, but let me add some nastiness to this thread. BAA opened at 0.241 today, and at 9:38am you told us: "I picked it up yesterday @.19" Would you make this post if we had 0.12 open? Usually I don't trust people who say something like "I'm glad I bought at the bottom yesterday" Of course, it's not the case here. I believe you 100%. Congratulations!
Yes, stupidity of terrorists who didn't have qualification to detect and recognize the real target (Ukrainian military plane). ""a monkey with a hand grenade" as they say...
Just trying to follow your logic: the Ukraine needs to accept its responsibility for shooting down 777 (actually shot by terrorists supported by Russia) just to let gold price go down and fill the gaps on your chart? Should they take responsibility for Ebola outbreak too?
"its not looking too good for the Fascist Ukraine cabal..."
Just keep looking at your "gaps" and "double bottoms" and stop talking about things you don't understand. Let idiots on political boards cite new Russian Fuehrer.
Domain Name: PMXGOLD.COM
Registry Domain ID: 1606872588_DOMAIN_COM-VRSN
Registrar WHOIS Server: whois.godaddy.com
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Registrar: GoDaddy.com, LLC
Registration expired 2 days ago. They need to renew it. So far this Web page is parked for FREE, courtesy of GoDaddy.com.
"Now look at PPS charts far back as you can with HL."
Well, I followed your advice. In 2001 silver was 4.1-4.8 and HL price was 0.5-1.1. PPS recovered pretty fast (4.5-5+ in 2002 with silver still in $5 range) but the PPS is definitely correlated with silver spot and will fall sharp if silver price goes where you think it should go. In general, long term HL is not as "stable" as one can imagine. PPS rallied above $10 and dropped below $1 last 10-15 years. Of course, fundamentals have been changing significantly (acquisitions, etc.) but price of silver was a major contributor (IMO).
Don't get me wrong - I like Hecla and own some. At least, it will never go bankrupt when many other companies do.
Some examples of your recommendations (forgot to include the link in my previous post):
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=94489355
How will $7.5 silver affect HL share price? Is HL buy, hold, or sell here? You are famous for "selling at the top" while telling everybody to buy. This what happened on USGIF board. Is this the case with HL now?
Would you believe the person who says that silver is heading to $7.5 and recommends buying/holding Hecla at current prices? When/if silver hits $7.5 HL price will be below $1. Both will never happen. IMO.
I did read his first 2 articles... My point is: Seeking Alpha is basically an open forum just like InvestorsHub They will publish ANY article that looks "kind of pofessional" and can generate many views and commentaries. I can name several SA authors that I don't like (mostly TA gurus) . If anybody deserves a punishment it's not author but SA itself. Maybe they should improve requirements and filters. It was not a joke... you can compile an article with opposite points, and they will publish it. The only reason I suggested this to you is because you are a "professional trader", so more than qualified to write analytic article on SA instead of playing with amateurs on IHub. IMO.
I suggest you, as "professional stock trader", publish opposite opinion with Seeking Alpha... about "company fundamental have been getting better" etc. And let's see if you can convince investors... or maybe they will start reporting you to SEC...
Norilsk Nickel (Russia) is the largest producer of palladium in the world. There are other mining companies producing palladium.
http://www.dummies.com/how-to/content/investing-in-palladium-through-mining-companies.html
One thing that is usually ignored in "China gold accumulation" stories is the fact that at least 600 tons of Chinese official gold reserves are stored at the Fed in New York: http://www.silverdoctors.com/chinas-road-to-secret-gold-accumulation-goes-through-the-ny-fed/
China probably wants to repatriate that gold but German efforts to repatriate their gold show that this cannot be done the "normal" way. So, some authors suspect that China has been quietly selling it's NY based reserves replacing them by new purchases that were mentioned in many reports. So, China could play active role in gold market manipulation: selling in NY during rallies (which contributes to price suppression scheme), and buying in Hong Kong and Shanghai when the price drops.
I agree. But trying to do this second time in 2 weeks, when last week "idiots" are still leaking their wounds, is too much... Although I know, "there's an idiot born every minute". ... Maybe that's what they call "frequent trading"...
10+ mln shares waiting to be unloaded at 0.0006. Did not have chance to dump during the previous pump? I believe what you and your gang are doing is a crime, but it's just me...
I have to admit I used to be skeptical about numismatics and aggressively claimed that PM content is the only thing that matters. Actually, it was true when gold /silver price kept going up… Now, after 2-3 years of falling prices, I see that numismatic items I sold to replace them with “more bullion” did not lose much value at all, while bullion items lost 20-40% and more… It was probably bad decision on my part.
Well, I was being sarcastic, sorry. But watching eBay PM items I do see significant premiums for rare gold/silver items produced by the companies that don't exist anymore (so no future dilution). If PMX Gold dropped their premiums to normal 5-10% to the spot price I would consider buying them myself.
Navy, it looks like the coin you bought from PMX web store was the only item they ever sold. That would explain the troubles you had to get it shipped. PMX Gold may had to order this coin specifically for you. OTH, it makes this coin unique numismatic item that will cover all your possible PMXO losses…
"Stockchat LLC has received seven thousand dlrs for the awareness of PMXO from a third party Cooperman Bros Inc."
https://www.otcdynamics.com/pmxo-newsletter-517-pm-may-6-2014-id-44266-15990/#.U2oRHIFdUne
"AimHighProfits.com expects to be compensated up to $10,000 by a non-affiliated third party in an effort to build investor awareness of PMX Communities, Inc. (ticker symbol: PMXO)."
https://stockpromoters.com/gmessage.aspx?message_id=83552
Cooperman Bros Inc
45 Vista del Rio
Boynton Beach, FL 33426 - View Map
Phone: (561) 375-9793
Let's see what Mark Goldstein is going to do with his shares today. :)
My point was not that Mr. Goldstein is selling shares. He definitely can do this (getting double and triple return on initial investment even at these depressed prices). My point was that management was lying to us all along. Was it only about insiders sales, or...?
BTW, does it matter where he pulled the shares from: left pocket (33 mln) or right pocket (~1,6 mln)? Actually, reading last 10-K we can guess that he used the following scheme: in 2013 Mr. Goldstein loaned the company $54,500 in a series of 9 promissory notes. The notes each have a 6-month maturity period with an annual interest rate of 5% and 10% after the maturity date…. As the company doesn’t have cash to pay principle and interest it converts promissory notes with a principal and accrued interest balance into shares of common stock at approximately $0.01 per share. One could sell them with 100-200+% profit multiplying that principal and 5-10% interest by factor of 2-3. Not bad, if you ask me… And again, of course, he can do whatever he wants with his shares... no law is broken, he is a lawyer after all. :)
Found my post, where I suggested that Mr. Goldstein was selling:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=93407687
Meris was one of the posters that replied (guess who? )
So, Mr. Goldstein has been selling shares for more than a year now.
I always suspected this, and asked Meris directly some time ago. On 10/28/2013 she replied:
“As for your digs at Mark Goldstein, I suggest you realize that he is the largest debt holder and his pockets and his associates have funded this venture from the beginning. He is never a seller and has to report all his trades. Lack of information makes you look silly on any investment board.”
Now everyone can see that Mark Goldstein sold almost 400,000 PMXO shares by that time. So, Meris was lying. I probably looked silly (because I was long at that time), but she definitely lookes deceitful...
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OK, you answered one of my questions: the company negotiates the amount and is going to resolve tax issue with the State of Delaware. Nice, we will see. And what about the second question? I contacted Russian authorities and received an official response from EGRUL (you know what it is, right?) According to EGRUL the Markray in Roshal is a private enterprise that belongs to Olga Smolnikova, and there is no connection to the Delaware corporation traded on Pink Sheets. They just have common name. This is a well known trick often used in Russia to confuse shareholders. For example, Valentin Chegenev also owns private twin of "famous" Mayskay in Roshal? So, what about this?
They are not going to dilute. They have hundreds millions of insider shares for sale and are eager to sell them at any price. Just a reminder: Markray Corp. in Delaware (RVBR) is an empty shell that, according to Russian EGRUL report, doesn't have any property in Russia. It has nothing to do with private company Markray in Roshal. This RVBR shell currently owes $180,499.29 unpaid taxes to the State of Delaware, and this amount keeps growing every month. It's obvious now that nobody is going to pay this bill. I don't know how long the State is going to wait before Markray is liquidated: