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(My understanding is that the canadian CNSX market is the only venue up there where a company in CCAA can get it's shares trading again - - I have a contact there and should inquire about their listing requirements and his understanding for Canadians being able to sell their shares down here - I believe the institutions have ways of doing it, but I highly doubt it for retail level)
>>BTW, the shares trading at the Toronto Exchange won't delist. Says enough
I think you mean unhalt - but no, that doesn't mean anything - go look at Artic Glacier - also Canadian company in CCAA - also a auction type liquidation scenario - a very successful one - still doesn't trade on TSX because that exchange does not allow it in CCAA - has done well with large institutional involvement post filing in US. jeez. (ticker here AGUNF for those who would like to do dd on a recent & successful CCAA case)
>>What do you think would be realistic?
I'm still trying to decide how best to approach valuing the ounces. One way to look at it - if you subscribe to the notion that the Tier 1s would be interested (and some say they wouldn't be) - is to look at their own valuations based on EV/oz in the ground. I have a table that looks pretty solid w/r/t the numbers they are using and, including inferred resource, Barrick trades at $69 and Kinross at $60. At $50, (again, this metric includes inferred resource, and maybe it's better to use just P&P/M&I), Burnstone is accretive at a billion dollar price tag. I'm not quite sure why I've seen smarter folks than me dismissing interest from the majors - the only thing I can figure is that the mill is maybe too small to throw off the annual output that moves their needle? I think the rarity of the deposit will get their attention....but I'm usually over optimistic on these things. All that said, I need to spend more time - I was aware of GBG prior to this week starting, but I wasn't following until the shares finally unhalted down here.
I don't know that I'd call this a firesale - that's the point of CCAA - to allow a stay of enforcement by creditors so that a proper marketing of the assets can be done. Of course, it's not a hostile takeover with the associated premium either. If this was a 500k oz deposit - I wouldn't be paying much attention as the only interested parties would really be bottom dwellers dumpster diving. That happened with the two Alaska properties that Tri-Valley auctioned late last year - I met the buyer in Vancouver as well - they got two great properties for $200k (which is all public record). I think what potentially makes this an honest affair is the size of the the properties, especially Burnstone. Everyone complains that the majors aren't replacing their production. Burnstone is a hell of nice asset to stuff in your channel and have production 12 months from now. If only one wants it, it will be stolen. But if there are two motivated bidders who have the cash to go the distance (and it could probably be structured as shares without much difficulty) - it won't be a firesale - that's how every bk auction works - sometimes they surprise to the upside, sometimes the other way. I'd still like a better handle on the honest price that makes it still highly accretive to a Tier 1 producer.
edit(I could also easily picture a Chinese Sovereign outfit being keen on Burnstone)
I'd use the higher numbers - you gotta throw the DIP loans, the extended DIP loans, the committment/funding fees, the 15% success fee on the sale of Burnstone (that's so BS), the attorneys, the accountants, the bankers - personally I'm using 500 mm as a hurdle, knowing I'm probably being overoptimistic by 50 mm.
When you say 900 mm to end ok, I'm guessing you are basing that on a pre-ccaa entry price? 900mm based on today's prices would be amazing.
I was up in Vancouver at the Cambridge House show weekend before last. The in-situ rule of thumb that I heard over and over from the few presentation I stopped in to listen to (in general, not specific to GBG) is 100 oz in the ground. Obviously, there are plenty of companies trading at an EV of $10 per ounce, but that was the number they were basically saying don't invest in any company that spends more than that on exploration because that is the average arms length price that is prevailing right now when properties are bought out. This of course isn't a buyout.
Going through SEDAR to try and get a better handle on the large holders - there has not been much volume in the last few days relative to the number of shares out. Sedar only captures above certain thresholds, which I believe are sometimes 5 and sometimes 10%. The only holder filing an alternative monthly report in the last 2 years is Van Eck Associates - but they were sitting on close to 62,000,000 million shares as of 6/30/12. Wonder what their plans are with those.
from Sedar:
As of June 30, 2012, the number of common shares of GBG under the control or
direction of VEAC has increased by 16,969,236 from the 44,955,986 common
shares previously reported and VEAC’s security holding percentage has increased
by 1.79% from the 9.42% previously reported.
edit: I see VEAC was also filing 13Gs with the SEC, and as of Nov '12 they were up to 68 million.
The book value was stated as not impaired BEFORE the halt (as opposed to 'value' stated). I'd like to try and build my own model. Do you not know what happens to shares in BK/CCAA? It's very straight forward in a liquidation, as this case is shaping up to be. You either get a liquidating divvy at the end of the show, or you don't - and it all hinges on what the assets get sold for. I love gold mines, and I love bankrupt stocks - I've served on multiple equity committee's stateside and Canada is a little different, but not much.
By 'wee bit of a more urgent matter' are you referring to the CCAA proceedings? Well those proceedings are heading toward dual auctions of the properties....so the fate of the shares rests on what those properties fetch at auction. So I disagree completely that anything is more urgent than getting a handle on valuation of the assets - that's all that is left in this case.
That's probably cost per oz, and that is hefty. I don't believe the Esmerelda mill was ever intended to be a long term solution, but works well enough for the trial mining phase. The mine would be more attractive for companies that already have extra mill capacity in the area around Elko. I've visited the area around the Esmerelda mill, beautiful country (Mark Twain wrote Roughing It about his stint as a gold miner in that district). At any rate, Esmerelda neighbors were complaining about GBG trucks tearing up the gravel road (GBG says the route is 80% highway but the back end of that route that I saw is out in the middle of nowhere. But Hollister is big enough with great grade to justify it's own mill closer to the mine, or bet yet feed an existing mill owned by a strategic bidder. Of course, with any auction, you need two motivated bidders.
By way of comparison, look at the cost (near 3 billion and counting) and the extreme remoteness of the Pascua Lama project. Barrick has spent decades bringing that up to the point where it is still not in production, and the resource is 17 mm oz thereabouts (granted that is all proved and probable category with huge silver byproduct credits). But, my point remains, decades and billions for a very remote and technically demanding project....that comp makes Burnstone look like a bargain with it's 5000 tpd mill permitted and in place for say 700mm, or so it seems. I guess the big question is whether the geologic kinks encountered during the ramp mostly require a bigger working capital cushion to work through, or are they more systemic. Can't find much data on that other than the disclosure made by mgmt that a team, crucially -hired by the lenders, to value the project just prior to the CCAA filing produced a report that did not require any impairments to carrying value. I believe they refer to it as the Snowden report....I'd love to see that report.
Does anyone here follow gold miners in general? I don't think I've noticed too many peeps here this past week about the Burnstone or Hollister resource. Burnstone is around 20 mm oz, in all categories (including inferred). Hollister I believe is over two. Both are very nice grade, Burnstone is 4 to 5 gpt in a world where the average grade of all mines in production is about 2 gpt, per the last decent analysis I saw on the subject. Hollister has some of the best grades in Nevada, though for now it has a mill almost 300 miles away...that's a little crazy fuel cost wise. I'm sure many are here just because it's bk and likely to be volatile, but I'd love to get some discussion going on the merits of the two properties given that this case is going to come down to two auctions, both likely to take place a few months from now. I'm not sure there are 25 viable deposits in the world that exceed 20 mm oz in all categories (though there are a few that are much bigger). Personally, I'm trying to find some good comps. In-situ numbers of 70 to 140 an Oz are common in buyouts right now, but this isn't a buyout. And there are producers, like Croc, making cash, valued at 20 to 30 oz in the ground, plus I'm not 100% comfortable using GBGs inferred oz as opposed to the smaller but still very large proved and probable resource. Thoughts?
1,950,000 print at .013 just hit the tape.
improvement over 1,000,000 print at .01 earlier today
Both mines are going to be sold. Creditors will get paid back with proceeds. If they are paid in full, along with atty/acct/banker fees, equity will get what is left over. It's that simple.
Did you read it? They sold.....out....completely
My bad - didn't catch the satire....and I do love satire.
Are you people seriously complaining about not having information spoon fed to you. Great Basin is in CCAA - if you don't know what is going on - you should move on.
I've mostly only traded bk stocks for the last 10 years. 7, 8, 9, 10 years ago, it seems like it was infinitely more possible to do solid dd and sniff out winners. 1, 2, 3 years ago - my non-empircal observation is that you may as well toss darts - I'm not doing that, but I probably should be. Look at K-V Pharma hitting .20 cents today, or ONAVQ over a dime. SATCQ is another great example - I know some very smart people who looked at that and could not see the value - but it ran to what .50ish before coming right back? What method would give you a better chance of hitting that upside run - throwing a dart or spending 200 hours pouring through their docket? 200 hours should have suggested it's worth no more than it trades for now - but it was more than a 4 bagger from when I first looked at it - measured to it's top. I said I bought a placeholder - that just keeps me from forgetting about it. If it goes 4x higher from here - my position won't even matter - except to upset me.
I took a placeholder in that the other day at .12ish. That's one of those big companies you never heard of - annual revenues in the 700 to 800 mm range....gross profit consistently over 200 million...and up until '10, making nice money. But, yet again, a usurious lender comes in and loans 70 million with almost inevitabl default provisions that trigger a 25 million dollar default premium, so that 95 million can then be credit bid under a DIP loan that requires what looks to be a punitively short marketing runway. Again, I took a placeholder around .12 but I think this one requires either 1) an activist fund on the side of equity who can jump in quickly and lengthen the runway or 2) a strategic buyer who has been watching this and is ready to show up at auction....because the top of their income statement is pretty damn good looking even in the tough environment they've seen the last two years - which isn't likely to improve - but with 250 mm in SG&A, there is room to turn the company around.
It's the same restructuring guys that came in on Chemtura. I didn't follow that case, but do remember equity doing well - though I've heard that had a whole lot to do with the EC keeping the CROs feet to the fire. If this was a restructuring, they would make me more nervous - but since it's headed toward dual auctions, there is a lot less room for flim flam with exit enterprise values, ie getting Kmarted (not saying that did or didn't happen with Chemtura, I did not follow it).
Have you gone through the ccaa monitor reports for GBG yet? The affidavits are pretty useful, as are the monitor reports. Another quote from the first day affidavit of Von Luuren (sp?) 'the board concluded the value of the Burnstone Mine should be well in excess of the obligations owed to the lenders relative to the Burnstone in any reasonable realization process of customary length' - at that point they had a data point from the unsolicited merger offer in May, no doubt some more data points from the strategic review process and I'd say that in general the market is slightly better now than it was in mid'12....without looking I think May was the low for the last few years.
I really don't think it will go that low....but with over 500 mm shares out and a near 6 month halt, it's hard to say what can happen in the very short term. I have two types of companies that I follow in earnest - bankrupt companies and gold miners - you don't often find bankrupt gold miners. I think Burnstone is a fairly unique asset with 6 mm ounce resource and 12 mm oz measured and indicated. A competitive auction process would not surprise me for this mine. If it get's near half a penny, I think we'll see some real speculative money come into the shares. As the company stated in their first day CCAA affidavit - this is viewed as a cash-flow insolvency case - not a balance sheet insolvency - that is almost a word for word quote of the sworn testimony given to the court. That view could be incorrect - but it looks like a reasonable opinion to me.
edit: Cork - don't I recall that you have a soft spot for miners too?
You think we can break through to the poor side of .01 in the next 45 minutes prior to close? I'm going long, but I'd rather do it even lower than here.
(edit) - it's been remarkably easy to get quick fills on the bid all the way down today.
(edit2) - level 2 showing only csti left at inside bid of .012 and it's getting hit relentlessly.
Siouxlookout - look for the ccaa monitor page - not sedar or sec.
There are plenty of updates if you know where to look - they are called affidavits and monitor reports now though.
>>bid is very thin to $0.0001..
I remember Birch Mountain back in late '08 - same deal, Canadian company that was halted in Canada but eventually came back online in US. Funds used the only window they had to get out and I got shares at .0002 - not because I thought they had value, but because I put a stink bid in at .0002 and got hit. Sold them for .03 a year later - the think is still around and trades for .0007 - all to say, these first few days of trading are going to more about people getting out. I happen to think that GBG might have some equity value at the end of the day - you do an in-situ model on their S.A. property and even using very low values for resource in the ground, it's not overly difficult to reach the claims hurdle at auction. Hard to say where the price will be in a week or two when those who just want out period get out. POG alone over the next few months could make for interesting days once this pent up selling pressure eases. Better odds than lotto tickets.
>>Ya know this co is not offically bk but it's trading that way.
Ya know it is most definitely officially bk (ccaa & chapter 15)
When some of their funds figure out how to dump shares to clear them out of their book for windowdressing - the shares could face some heavy pressure - I hope so, I'll take these cheap for the possibility of decent auctions in April.
>>I had a field day yesterday buying, wait till GBG shareholders hear about GBGLF, hmmm. I think yesterday's volume will be surpassed daily.
I spend a fair amount of time in Canada - most Canadians, even in the securities industry - are shocked to find out their halted companies trade down here.
I've added here and there.
It was a WPG press release, but yeah....go EVEIQ. Catch ya'll later.
getting back on track wrt EVEIQ, I do agree with the blogger that WPG has significant interest here. From a 1/25/12 press release, they went so far as to incorporate a US sub and go out and hire several EVEIQ technicians in order to retain a knowledge base pending the liquidation. They've since disbanded that sub and the employees, but still express continued interest. My guess would be that WPG realized they weren't a shoe in for the IP, and did not want to risk running the expense of retaining employees for a protracted marketing cycle and then not get the IP.
Scroll down about half way for discussion of New World Coal Mgmt http://www.4-traders.com/WPG-RESOURCES-LTD-6500101/news/WPG-Resources-Ltd-2012-01-31-December-2011-quarterly-report-pdf-5741-KB-13993345/
Vote results are posted on Pacer....class 5 rejected.
Is it anyone from here blowing up the volume on Cougar today?
Cougar has definitely had a promotional past - SISM was putting out most of it. Google SISM Cougar to see some of the pieces that were put out - that on one hand puts a bad taste in my mouth. On the other hand, to Cork's point - the assets aren't completely flimsy (they aren't insanely robust either). If I try to put myself in the shoes of the DIP lender/major shareholder, I think I might be more inclined to try and keep the share structure in tact, take my pound of flesh in cheap shares/warrants, and spin a comeback story around getting the wells back in production with the pipeline running again etc. The promotional past suggests the powers that be here would rather 'run a public company' than an oilfield. I'm ok with that if I can get in around a nickel. :) For now I plan to accumulate a few more and watch the flavor of the news updates that come out. The DIP has been approved according to court docs, so the deposit should be made shortly to reopen the wells - really interested to see if and how that gets described by the company in a press release.
http://documentcentre.eycan.com/Pages/Main.aspx?SID=235
You probably found this page already - it's as close to pacer as one gets in Canada.
No they don't owe it for sure, and none will be altruistic....I certainly wouldn't be. But it's a lot easier when it's just one fund to steamroll the process. One of the three is making the DIP loan. Let me put my thoughts another way....if there was only one fund heavily involved, and that fund was making the DIP loan, I'd be really concerned about lack of counterweights to their influence. So long as the other 2 defend their equity interests, my equity interests are the same ones. If the three were going to collude, they would have done the DIP three ways....I think. At the end of the day, it's all odds and reading tea leaves.
Share structure wise, there are three funds that appear to have large % ownership - the three accounting for a little over half of what is outstanding. Having three vested interests in equity should help when it comes down to formulating a plan - not a guarantee of anything, but it helps. Hard to find much hard detail though, and Cougar appears to have been overly promotional in the past. It's definitely interesting.
They were doing around 200 barrels a day prior to being slowed down by the pipeline issues and then shut in by the provincial gov't
How about COUGF - another Canadian bankruptcy. They have their DIP loan for 1.7 mm and it was approved by the court 2 weeks ago - they needed that to get their wells turned back on (Canadian provincial gov't shut them down for failure to post adequate remediation assurance bond, which was in large part due to a breakdown of a pipeline that served their wells in '11 - it all affected some formula that greatly increased their bond deposit amount). No pacer though, they don't have it in Canada - the Canadian lawyers I've talked to can't fathom pacer when I tell them how it works down here. Of course - there are still means of acquiring public info that most are not familiar with :). I've been buying this one the past few days. Sloppy past, but I like the ownership structure.