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Okay, so you object to looking for someone more qualified to run a mining company. May I make a suggestion?
How about someone more qualified at litigation? Brent only has a long string of losses under his belt so far.
Or how about someone better qualified to negotiate joint ventures? Brent's efforts (Tronox, Amex, JL) have been sloppy, risky and have cost MSX a lot of money.
Or how about someone better qualified to administer a business? Mr. Johnson has overseen glaring failures in meeting regulatory requirements, and (if you believe his story) he failed to supervise the negotiations between Tom Jackholm and his mother, resulting in a lawsuit that threatens the company's viability.
Or how about someone better qualified in public and investor relations? No communication. No real website. Poorly written, contradictory and retracted PRs. Secrecy and murky dealings (for example with Steve Davis).
Brent has been permitted a lot of time and leeway to prove himself as a leader, and he's failed. Even if we can't agree on the ultimate direction that MSX should take, can we at least agree that Brent Johnson is the wrong guy to get us there?
No doubt. Some issues are tricky, but some are so easy that it defies understanding that Mr. Johnson wouldn't just declare his position and remove the uncertainty. As far as I'm concerned, dealings with Mr. Davis and Kanco are in this second category.
If Mr. Holt wants to trot off Las Vegas and play a conspiracy theory detective game with Kanco, that's his business - if he's doing it as a hobby, and not as a representative of MSX. When Sharon Cook implies that he's participating as part of his official capacity with MSX, Brent Johnson has a responsibility, I think, to clarify the matter.
When Mr. Davis, on the other hand, states that he has nothing to do with MSX, I'm calling it out as dishonest. His words and actions prove him a liar on this matter.
On a personal note, he recently declared that he has me "checkmated". He's said this before about other people, and I'm forced to conclude that the tin-foil bishop's hat he wears when he plays chess has hampered his understanding of the game.
Checkmated?
Steve has failed at every stage in his aspirations to involve himself with MSX. His evidence was tossed in Washington. It was later tossed again in Arizona. His "agreement" with MSX re: Kanco never came to fruition. His secret meetings with Brent left him supporting Mr. Johnson for a time, but when it came down to his "big reveal" on Dec 16, Mr. Johnson wouldn't stand beside him, and Steve Davis was left twisting in the wind. He's announced his "retirement" from posting a number of times, but it never quite sticks. I wonder why? It's because he's still working his angles... meeting with directors (current and former) and shareholders of Mountainstar. Does this sound like a guy who wants nothing to do with MSX?
Then he states that he has me identified. What a crock! It's such a lame attempt at intimidation. Once again, push come to shove, his brave declarations disappear behind a flurry of internet clippings. He hasn't identified me, there never was any smoking gun, and Steve Davis couldn't checkmate a chimp.
Mr. Davis is at it again, and I'm just the guy asking questions about it.
It wasn't me who drafted the PR/agreement between MSX and Kanco... it was Steve. It wasn't me who announced the Dec 16 media event (which never happened) to detail Mr. Davis' relationship with MSX. That was Steve too. It wasn't me who had secret meetings with Brent Johnson and other board members and major shareholders, as detailed in Steve's most recent message.
I think he'd like to put it out there like I'm fabricating his continued connections with MSX. I'm not. Kanco is Steve's creation. Sharon Cook is a close affiliate. When Sharon announces on behalf of Kanco that there is some ongoing behind-the-scenes business with officers of MSX, are we supposed to pretend it has nothing to do with Steve Davis and his continued attempts to implicate himself into MSX?
He says that I am "fully identified and a liar". My answer: Steve couldn't identify my city of residence, my occupation, my marital status, my gender or the color of my underwear. If he could, he would have done so by now.
As for being a liar... well, all I've done is asked questions. And I'll say this as emphatically as I know how: if you go back through Mr. Davis' postings here and elsewhere, it is his conduct that raises the questions. If he really wanted nothing to do with MSX... if that were really his intent, he could have made that choice a hundred times by now.
He hasn't. So the questions remain.
Why can't we seem to shake Steve Davis and Kanco?
This is, I would argue, a valid business issue for MSX, and worthy of discussion. When you have an unknown number of "Kanco Shareholders" and Steve Davis himself allegedly in discussions and negotiations with Brent Johnson and now Steve Holt, you have to wonder why it keeps happening.
I suppose it goes back to that ridiculous press release where the board of MSX (what were they smoking?) signed an "agreement" to cooperate with Kanco and to provide assistance.
Let me put it this way: wouldn't any competent business leader have put this issue to rest long ago?
It wouldn't take much. Pull back the curtain, Great and Powerful Oz. Have the integrity to say to the people you work for either:
a) We are working with Kanco in the following manner, and this is what we're spending on it...
or
b) We have no relationship to Kanco or Steve Davis.
All this shady dealing makes Brent (and maybe now Steve Holt) appear to be crooks. That's not what we need from our leadership.
Or are we just done? Are we done pretending that MSX is a legitimate business? Because that's the way it sounds. Why would you leave the loonies out there to leak this, allege that, and all the while imply that there's some "deal" pending with MSX?
Doesn't MSX leadership see how this looks to investors?
The 1.5 billion, whether from Russia or Florida or elsewhere, is a fairy tale IMO. What credible source is there that there has ever been an offer of this size from anyone, with ABX behind it or otherwise?
It may work as a hook for Mr. Johnson to keep the gravy coming for a while longer.
"Just kick in another $75,000... there's big money waiting in the wings."
From what I'm hearing here, he's said a lot verbally, even to large shareholders, that has turned out to be bunk. A $1.5bil offer based on what MSX has in hand sounds very much like bunk to me.
It'll go on for so long as people keep feeding the beast.
If you put money into MSX, and Brent remains in charge, he has shown you how he'll handle it. I know he's out there pressing any angle to get more money... he would love to be able to divert some cash to that "Due to related parties" line.
Personally, looking at the statements on Juneau, it looks like a genuine mess. Trotting it out now... after 5 years of waffling around... after writing off the loans with our "partner" as bad debt... after receiving a report that the title has serious defects... it smacks of desperation, and frankly of diversion.
The real play (and the majority of the money we've spent) is in Chile. Brent has mismanaged this agreement to the point where our potential partner is set to walk away scot-free with 5mil. Investors should be howling at this, but Brent thinks they'll pull out the check books and trust him to blow more of their hard-earned cash because he's pointing at a new(ish) shiny object.
This from a guy who hasn't to my knowledge ever produced a penny of value for anyone.
Support MSX. Support MSX financially, if you think it's worth the risk. But for pity's sake, hold your wallet until Brent has stepped down or been forced out.
I admit it's a possibility, but I'm going to make a counterpoint to the opinion that shareholders should just give up and lick their wounds.
It was a lottery ticket, goes the argument. What do you expect from a penny stock?
I've kept on this stock partly for amusement, I'll confess. There have been some bizarre moments. But the above argument is (almost) the most irrational thing I've heard here.
Sure, the purchase price of the stock is under a dollar, so it's a penny stock. But who do you know who's buying in single shares? This isn't a game of small dollars for many investors. Read the releases on the private placements, and then tell one of those buyers who doubled down to the tune of tens of thousands that it's small money. Maybe they can afford a loss, but it's gonna sting... and I'm sure they'd now rather have spent that money on a nice car, vacation, or lawn ornaments, for that matter.
Even some of the larger investments can't provide scale to this whole mess. At this point, Brent Johnson has presided over losses to the tune of between 10 and 20 million dollars. Maybe some of you have been more productive in the economy than I have, but this figure wipes out the entirety of my expected lifetime earnings several times over.
That's why I don't view this as an easy-come-easy-go kind of a situation. It blows me away that this much money has found its way into the billings of lawyers, Mr. Lopehandia's warchest, and Mr. Johnson's lifestyle.
So at this point, I'd like to know for sure if it was all a waste. Maybe... just maybe...there's some value in there somewhere. I know JL has his name on some mineral claims, and that we've paid him millions of dollars for a chance to partner with him. Unfortunately for MSX shareholders, Brent has structured the deal, and is managing the company in such a way that it looks more a more likely that JL with be able to walk away with every penny he's taken so far, without ever having to prove that he has something of value.
Ugly.
That's why I'm so adamant that Brent Johnson has to go.
Has he just been feeding at the trough, with no real prospect of returning anything to investors? Is he just holding on now to squeeze the last few suckers for whatever he can get, and to delay the inevitable lawsuits?
Or is there something of value and Mr. Johnson just doesn't have the skills to bring it home?
Either way, we need him to get out of the way so that someone we can trust takes the helm, and maybe steers the ship away from the rocks.
You and I fundamentally disagree on strategy, and I'm not sure I'll be able to change your mind (although I'm happy to try).
The lawsuits = uncertainty. Lots of it, and for a great length of time.
I've looked at the reports & the title documents that have been made available. I've read what MSX has written, and what Mr. Lopehandia has posted here.
About all the certainty I have is this: Mr. Lopehandia has some claims with his name on them.
Where they are... what they're worth... this important information has been obscured by all the bluster.
If Mr. Johnson were any sort of a leader, he would have acted on this long ago and done some geological testing to prove that the claims are worth something, which would support the value of this company.
It's the most direct way to prove or disprove JL's allegations.
So far, MSX has thrown millions of dollars at Mr. Lopehandia, letting him decide the strategy, and allowing lawyers to file a series of lawsuits.
The result: so far, nothing.
Tell me. If Ms. Salinas were to be successful in her bid to "have a resource protection declared", what would be the financial upside for MSX?
When Barrick is fined for environmental violations, does that money go to MSX, or to the government of Chile?
So far, JL has maintained that the ABX site is in a different location than his claims, but that the Tesoros concessions are improperly included in some of ABX's filings. His own expert seems to agree with him, that ABX is preparing a "new Pascua area".
Let's say the courts eventually get around to sorting out the whole mess. They dissect all of the different named claims in the area, making a pile that belong to Barrick, a pile that belong to JL, and a pile that seem to overlap. What then?
So you know what the courts will do with that mess? I don't.
Do you know if the resolution will call for financial penalties to either party, or if they'll just clarify the claims? If there are financial penalties, how do you guess at the size and direction? Do they go to one of the litigants, or to the government? Or to a regulatory agency, if ABX has misstated its claims? Who absorbs the legal costs?
Even according to MSX's own releases "there is no guarantee that Mr. Lopehandia will be successful in his litigations and accordingly, there is no guarantee that the Company will be able to acquire any interest in the Pascua Lama project."
In a court of law, JL could lose. Frankly, with MSX's win/loss record in the courtroom, I wouldn't bet against it.
I know JL's set on a fight in the courts, but that doesn't mean that MSX has to support this as the best course of action. If he has claims in hand, and we can bypass the whole mess, why wouldn't we? If we could spend the same millions we would spend in court, but put it into geological testing to prove JL's claims... isn't that better than the uncertain conclusion in a courtroom, an untold number of years from now?
Look at it this way for a moment: if MSX could prove that the majority of the gold is on JL's claims, wouldn't that checkmate ABX anyway? Why take a risk on the vagaries of courtrooms, politics, and possible corruption, when a few core samples in hand would sort the whole thing out?
I scary question is this: what's holding MSX back? Is JL afraid to have his claims put to the test? Does the uncertainty benefit Brent's personal interests? Would Brent rather spend years collecting pay and benefits while the courts chew on this one than see it resolved once and for all with geological testing?
I wonder what kinds of questions the BOD are hung up on, and if they share my concerns at all.
You're right. Juneau doesn't matter.
I only bring it up to demonstrate how utterly careless Mr. Johnson is with shareholder money. Left on his own to negotiate on properties, his default position seems to be: "Okay, let me start sending over wheelbarrows full of money, and you tell me how it goes. Oh... and if it doesn't work out <wink, wink> I'll assume that you have assets somewhere else to pay the shareholders back with, right? Uh... no... no written agreement is necessary... not unless the regulators get involved. Yes... go ahead and order whatever you want... I'm expensing this meal."
Where you're wrong is on Chile. Barrick has already folded up their tents and walked away from this thing. Last I heard, Lopehandia's lawyer is applying to talk to the court about adding additional environmental protections to a project that is not being worked on. Which means...?
Which means that MSX has no plan and no play but to throw stones at the other guy. When the other guy walks away to a safe range, what's the game then?
Meanwhile, JL has publicly maintained that MSX could pick up shovels and begin mining on his claims immediately.
Give your head a shake.
Prove our claims, and we win. Sounds a lot more productive than chasing paper through courtrooms in Chile.
Not to make light of it, but it is a bit funny if the garage is the one detail that puts Mr. Johnson's poor leadership into focus.
There are so many.
Read the notes in the annual report on the Juneau agreement:
In March 2008, the Company entered into a verbal option agreement with AMEx pursuant to which the Company acquired an option to acquire a 50% interest in AMEx’s Juneau Project exercisable by paying to AMEx a total of US$700,000 (the “Juneau Option”). This verbal option expired on December 1, 2011. By subsequent verbal extension amendments the verbal option was extended to December 23, 2013. The Company is in the process of verbally negotiating for an extension of this option agreement. As of April 30, 2013, loan advances totalling $574,980 had been made to AMEx (Note 4).
Note that the whole agreement to this point was, yes, verbal. Who does business this way... shelling out hundreds of thousands of dollars with no security posted on the other end? Oh yeah... Brent Johnson does! He did it with the Lopehandia agreement as well.
Under Brent's leadership, millions of dollars have been redirected into the hands of third parties, with almost no safeguards for shareholder value.
This isn't innuendo, JL (in case you were planning to sue me)... it's the bare truth.
So what is the business?
Directing money into the hands of lawyers on worthless lawsuits?
Directing money into the hands of third parties, with no plan to get it back?
Yes, and yes. But for Brent Johnson, those are just window dressing. He has to have something to sell when he's raising money, after all. But the real pay-off for him is in those fees.
Administration fees. Investor relations fees. And it sounds like maybe "Office" is another line where Brent is taking some gravy. It wouldn't blow me away if there were other expense accounts that ended up partially or wholly in Mr. Johnson's pocket.
Does any of this surprise anyone? In all his time with MWR/MSX, Brent Johnson hasn't produced anything of value for investors, but he's kept himself well fed. Does it tweak you that some of that money is in his garage? How about his whole bleedin' lifestyle? Bought and paid for with MSX money.
Sorry angrymoney, but I suspect the ship has sailed on that money. I have a few reasons for thinking so:
1) The money was never secured by any assets. It was not held in trust. It was spent. If JL were obliged to try to pay it back (which I don't think he would be) he would simply plead financial hardship to the courts, as he did when ABX won it's judgement against him. Any hot air about "other properties" is likely just that: hot air.
2) The return of the money was contingent, I think, on JL not providing "clean title". I don't know why BJ would have done so, but he's already publicly announced the satisfaction of this clause - so now it would be hard to argue that JL has breached.
3) The most likely scenario for breach is on our end - MSX has not kept up with the payments agreed, and is unlikely to come up with a full payment before the agreement expires. If MSX breaches, JL owes nothing.
Is there a name for the kind of mismanagement that allows a third party to walk away clean with 5 million in company assets?
Fraud? Incompetence? Breach of duty?
No wonder JL only wants to deal with Brent.
I wouldn't expect anyone to substitute my judgement for their own when it comes to Mr. Lopehandia's trustworthiness. I'll only say that a reading of his entire record of postings may bring more questions than answers about his statements and especially his demeanor.
When I review your numbered statements, I can agree with all except #1.
I think JL has a claim to something. I don't know what it is.
I've given my opinion (even to you, I think) before about why it may not make any sense for Barrick to go "head-to-head" on JL's claims. The fact that they won't engage in a direct fight is inconclusive. I tend to think it's a losing move for them, whether they prevail or not.
It's this lack of clarity on what JL has that makes me argue again that Brent Johnson is not the guy who can sort this out. He has a record. He gave money before agreements were signed, and indeed, before even basic due diligence. The agreement he struck, when finally inked, was so favorable to JL's interest, and so unrealistic in MSX's ability to meet the terms, that IMO it calls his competency or honesty into question.
And now, of course, JL howls that he will do no business without Mr. Johnson. But who's interests was Brent Johnson supposed to be representing? Ours, or the guy on the other side of the table?
I wouldn't mind saying something about my career. For many years, part of my job included judging the truthfulness of people making a monetary claim against my employer(s). When I began this part of my job, I was what you might call a little naïve - as opposed to my now quite dubious nature.
One of the first hard lessons I learned had to do with scammers who would come off as quite aggressive. Loud, abusive, threatening. I crumbled on the first couple of scams. It's hard to deal with. Here I was, trying to give the benefit of the doubt, and these guys would come in and "turn up the volume" so quickly that I felt unprepared to turn them down.
Steve Davis comes in with this exact manner. So does Jorge Lopehandia.
My first interactions with them on this board were not pleasant, because when I asked the most basic questions (politely, I may add) they hit back with venom. Threats. Namecalling. Accusations.
That kind of a aggression is a real "tell" that someone is obscuring the truth.
Now, I have no idea how to judge the full truth of JL's claims, and no interest in doing business with SD.
I do think JL has something. But what?
My unfortunate conclusion is that Brent Johnson, the man who has a responsibility to investors to sort this matter out, is poorly prepared to get to the bottom of it. He entered into an ill-considered, unrealistic deal, which has left all the cards in Mr. Lopehandia's hands.
Now, when investors cry out a bit, and begin to consider what kind of a job Mr. Johnson has done, and whether someone else could do it better, UP POPS JL, howling that he will no do business with MSX unless Mr. Johnson stays completely in control.
Hmmm...
Lots of wind a fury...
And it's hard to understand how someone from the other side of the negotiating table thinks that he should decide who should sit on our side. Advantage: Lopehandia.
Thoughts on the departure of Steve Davis:
First of all, my crickets are quite bummed that they won't get to chirp at Steve's announcement.
<Creek-eek>
Hush Jerome!
Secondly, when I found out that Steve was gone, I thought it was a perfect time to clear the air. I cracked a window, powered on a fan and lo! It turns out that what we assumed was smoke from Steve's "smoking gun" was only steam rising from all the horse manure he was shoveling.
Thirdly, I ponder whether Steve's absence will last.
On the one hand, this isn't the first time that Steve has announced his departure. Also, his talk about how is "agent" will meet with shareholders and board members makes me think he's trying to keep his hand in.
On the other hand, he may finally have gotten the point that Brent Johnson will never live up to anything he's said behind the scenes, and will never publicly allow himself to be associated with Mr. Davis. It was quite embarrassing for Steve to hype an announcement, only to be left twisting in the wind by his "allies". So maybe it'll stick this time.
In any case, a rare bit of good news for MSX.
The Cease Trade Order has been on since roughly Sept 10, not Oct 10 as stated by Brent Johnson. That makes it currently about 95 days in, with no official outlook on trading again.
The closest thing we have is 2nd hand information from Rover here, who tells us Brent said MSX would trade again in "about 10 days". That would have been from around Nov 21.
So for those of us trying to figure out what Brent intended by this statement, 10 days would have been around Dec 1.
But he didn't say 10 days. He said "about 10 days".
Like the optical store that offers glasses in "about an hour".
So what does "about an hour" mean? 45 minutes. Yes. An hour-and-a-quarter? An hour-and-a-half? Yes. Probably either. Two hours? Not really. If they'd meant to offer glasses in "about two hours", that's what the ad would state. It would be hard to imagine a manager of that store arguing with an irate customer that "about an hour" could mean 3 or 4 hours, or a full business day, for that matter. It would be a ridiculous argument.
So, what is "about 10 days". 8, 9, 10, 11, 12. Sure. 13, 14... mmmm, not so much. If he'd meant to say "about two weeks" that's what he would have said.
24 days? A month? Two months? No. Not reasonable.
Keeping in mind, of course, that he's pretty much free to make any lame-ass promises he wants to verbally. Russian investors... sure. Good testing results in Juneau... why not? Close to winning in Nevada? Sure. So long as he doesn't announce it publicly, it's just a bad smell in the wind as far as regulators go.
Listen up, folks. If Mr. Johnson is out there hitting you up for money, you may want to compare what he's telling you "behind the scenes" and what he's disclosing per his legal requirements.
Smell something...?
What does Steve Davis have to do with MSX?
Apparently nothing.
On Nov 27, he pre-announced "On December 16, 2013 I will be filing a Kanco Energy Inc (Nevada) Press Release in New York with the eight Class Action Law Firms (against ABX/Pascua Lama) detailing our relationship with Brent Johnson and the new MSX BOD (Bob Scrannage and Steve Holt) since February 8, 2013."
(emphasis in bold is mine)
Since then, he seems to be panicking a bit. He's gone off about a Russian scientist, an Australian industrialist, Kanco defectors, Navajo windtalkers, the Utah attorney-general, the Vatican, exposed JL as an agent for Villar (?!?), and gone through all sorts of threats and attempted intimidation of MSX shareholders.
For what?
Obfuscation.
I guess he figures that if he throws enough crap out into his messages, people will forget what he promised to announce.
Now he says "With the arrest of Provo, Utah resident Tim Lawson on Thursday, December 12, 2013, my public announcement came early..."
That was his announcement? Some guy in Utah gets tossed in jail, and that's supposed to clear up his relationship with MSX?
I guess he got cold feet.
Question: do I start the crickets chirping now, or do I wait for the non-announcement on the 16th?
You have no choice but to ride it out with the existing players, the opinion goes.
Wrong.
You have no power to force management to listen, so you should just sit down and shut up.
Wrong again.
It's funny how quickly those who agree with Brent Johnson's leadership turn into petty dictators - "fight the power" when it comes to ABX, but when it comes to those shareholders with a dissenting view it's "you're powerless - there's no point in putting up a fight."
No, I don't suppose that Mr. Johnson will be forced out by a show of hands, or even a strongly worded resolution - but it you're concerned about the direction of his leadership, sitting on your hands isn't the way either.
So what will influence him?
MSX has an ongoing need for money. Pissing off his current investors is short-sighted. An upset investor is likely to warn off friends and relatives, and to make noise on forums like this one, where potential investors may be looking for insight.
Our silence only enables Mr. Johnson to continue in the same disastrous direction. Look at the $75,000 that was loaned in after the CTO. Imagine if the benefactor had instead held out for changes in strategy as a condition for lending in the money. That's the only way change will come before it's too late - if the level of noise is enough give anyone pause before writing another cheque for Mr. Johnson's salary.
I don't want to see MSX starved all the way to bankruptcy - but I also have no doubt that unless there is change, that's where Brent Johnson is steering this ship. You might be along for the ride, but you don't have to pretend that it's smooth sailing.
What kinds of questions were in the letter from Bob Scrannage to Brent Johnson? It may be enlightening to understand what information Brent is withholding even from the BOD. What does he have to hide?
Steve Davis is threatening lawsuits against posters who don't like the idea of doing business with him. Mr. Johnson... are you sure you want to be affiliated with this guy?
Here's the extent of his legal expertise:
" In Canadian Law, you're guilty until proven innocent (very different in the US. "
This seems to be a recurring theme. JL said it incorrectly about Chile, and then was proven thoroughly wrong. Now Mr. Davis is floating the same "Napoleonic Code" BS about Canada.
Did he forget that he's dealing with actual Canadians? We live here, Steve. We've observed the justice system. Many of us have served on juries. And you're going to try to sell the story that there's a legal presumption of guilt? C'mon, Brent. This guy's too much!
No matter. In a week or so, he'll "reveal" his relationship with MSX, and MSX will in turn reveal to him the sound of crickets.
And if his capacity for self-delusion weren't quite so high, that'd be enough to clue Steve in on the value of his partnership.
I checked for the Monthly Progress report. It was due last week. With Mr. Johnson's past performance on filings and such, I guess I'd have been surprised if it had been posted on time.
"Diligently", eh?
That's the word used described how the MSX BOD is working?
'You keep using that word... I do not think it means what you think it means.'
Pardon my Spanish accent.
Look at the bar Brent Johnson has set...
...on regulatory compliance / filings
...on public relations / press releases
...on supervision/management (see his own defense in the Jackholm suit)
...on success in litigation
...on investor relations
Yes. I do think it likely that someone with the most basic business skills could outperform him.
The other question, though, is whether investors' hands are tied. Since Mr. Johnson seems to have enough votes to keep himself in the position, are we just forced to ride it out, as some have put it, and let BJ, JL and SD run the show?
Although Mr. Johnson has done a shrewd job of protecting himself and JL from any accountability, his power is not absolute. There are limits.
One limit that he's run up against one several times (and lost) is securities law/regulations.
Another limit is money. Now you may correctly observe that as an existing investor in a minority position, your leverage is minimal. However, Mr. Johnson has shown himself vulnerable to pressure from investors before... particularly since he's going to need plenty more money before this is over.
If he burns down his past investors, it creates an incredibly negative environment for raising new money - either by going back to those same people, or by trying to find new investors who haven't heard the negative "buzz".
Look at the PR released on June 4, 2013, and ask why he would take that action? Because he needs more money in the future, and has a worse chance of raising it with a bunch of previously-burned investors talking smack.
This is our lever. It may be our only lever, and I hope it's enough to move Mr. Johnson on one or more concessions. Right now, any sense at all that he feels accountable to investors would be a positive thing.
Can you give any reasons why you think PI Financial has something to do with the CTO? It sounds like a red herring to me.
MSX management had a responsibility to meet regulatory requirements, and they failed to do so (again). As a result, MSX got slapped (again). Mr. Johnson hasn't even made a public suggestion of anything different.
I don't know what we're all stressing about, tho. In 9 or 10 days Steve Davis is going to blow the lid off this whole thing. He'll reveal his relationship with MSX - and if Brent stands up there with him, maybe Steve will "allow" trading to resume.
Your post got me to thinking about what it would take to make this an attractive investment again. Barring some pie-in-the-sky deal where someone with big pockets steps in and just begins to throw piles of money at this thing, the BOD needs to change the story so that this company can raise money from individual investors.
My concern is that a new investor (or even an existing investor, who may be convinced to double down) may be put off when they look closer at weaknesses in MSX's strategy an leadership.
Three points which I think MSX needs to address:
1) (Stolen entirely from the Hopeful post I'm responding to) MSX needs to drop the risky distractions. Fitzgerald was a very expensive series of losses. Close the book on it, and end the uncertainty of further financial drain. The last thing that an investor wants to see, IMO, is MSX take another run at this with Steve Davis. Imaging trying to sell a new investor on his investment while some nebulous money-laundering, price-fixing, mind-control lawsuit against the State of Utah, the Church of LDS, Barrick and a handful of past US Presidents/Canadian Prime Ministers is waiting in the wings. Likewise with Alaska, Montana and Nevada. Chile is the only play that matters.
2) The strategy in Chile needs to be something more than "keep throwing sticks at Barrick until something happens". It's costly, the outcome in uncertain, and it has no end in sight. Simple: JL has title to something. Prove the viability of a mine on that site, regardless of its relationship to the existing Pascua Lama project, and you have something to hang your valuation on.
3) Change leadership. I've been drumming this one for a while, and there's no point going back over my reasons. Actually, I'd like to acknowledge a valid objection to my opinion. Tibby has quite rightly pointed out that JL might not go along with a change of leadership, and since he has us bent over a barrel, we have to do what he says.
You're right, Tibby. If this was approached as a mutiny or a coup, I think JL might take his marbles and walk away. But it doesn't need to go down that way, IMO.
Mr. Johnson is a major shareholder, and he stands to gain in a serious way if MSX succeeds. If what I've said is true, and attracting serious money is impossible with these big questions of strategy and leadership, might in be in his own best interest to step aside in an orderly transition, and keep JL on board?
I wonder if Mr. Johnson has it in him to put investors first. He could explain to JL that raising money is nearly impossible with this much uncertainty. JL doesn't want to run out of money. JL doesn't want to risk what credibility and profile he's gained through this partnership. Mr. Johnson could explain what a stabilizing effect a qualified leader with no baggage could bring to the situation. He could assure JL that he'll stick around on the board to ease the transition, and make sure that past commitments are met.
So far, this has been posed as an all-or-nothing with-me-or-against-me thing. This may have worked pretty well in a communist-era military dictatorship, but it doesn't play very well when you have your hand out for money, as recent attempts to raise capital have proven.
Worth a try?
While you're counting deadlines:
1 more day until MSX is due to post a Monthly Progress Report.
5 more days until MSX cracks 3 months of no trading (unless Mr. Johnson was right, and trading resumes before then)
6 days ago was the end of another quarter, so we should see another financial filing at some point.
11 more days until Steve Davis' big reveal about his relationship with MSX. I wonder if Mr. Johnson will stand with him, or leave him out there to swing in the wind.
What did I miss? I know there were some dates/deadlines floated around the Chile case, but I'm not sure how meaningful that is if ABX has halted the project anyhow.
If Mr. Johnson's silence is going to force a guessing game, then I guess I'll play
I've heard the theory before that MSX was being driven down by short selling, but please hear me out on this.
1) Short selling is not an effective long-term method to suppress stock prices. The seller needs to, in effect, "borrow" shares for shorting. The risk is that if there's any buying pressure at all, not only might they have to absorb massive financial losses, but in the process of "covering", the short seller can inadvertently drive up the selling price. It's not a good strategy, and I can't see any intelligent adversary taking the risk that it would backfire and drive up MSX's value.
2) It's not born out by the numbers. MSX's value has held relatively stable between .15 and .20 for months with minimal volumes.
So why, based on a stable valuation (with little buying or selling pressure) would Mr. Johnson see an advantage in sabotaging his own filings to be placed under a CTO?
It's a bit like this: I don't like the way my daughter drives my car, so I'll park it illegally and have it impounded. Yes, it may stop her from driving, but it isn't without a cost to the other drivers in the family.
Couldn't there be a better way to handle it?
In Mr. Johnson's case, his actions (or lack of actions) have cost shareholders the liquidity of their investment. It's one great advantage of a publicly traded company: if you like your investment, you have the freedom to bid again and buy more. If you don't think it'll turn around quickly enough, you can sell. If you got in a bit over your head, and need the money for a mortgage payment, you might take a bit of a bath on your timing, but at least you have the choice to cash out. But Mr. Johnson has lost that opportunity for everyone.
If he did it on purpose, he should cop to it, and let investors know his reasons.
If he did it by mistake, he should own up, and let investors know what he intends to do about it.
The silence makes him look shady. Does it occur to anyone that Mr. Johnson has never even owned up to skipping the OSC hearing? If it were left to him, investors wouldn't even know about it. We find out from the regulator that our company didn't even bother to show up... and we get silence from the people who are responsible to us.
Olderbytheday, everyone wants to be the "good guy". Most of us would like to make a little money along the way, but we'd like to be "in the right".
I'd suggest that you can't fight dishonesty with dishonesty of your own, and then call yourself the "good guy". Mr. Johnson has unclean hands, and IMO, he should resign.
You want some more examples of his unclean hands? I've caught a few glimpses into his character that really raise the hair on the back of my neck.
The Nov 22 statement was in the Monthly Progress Report that was overdue from Nov 7th... gotta give it to Brent, at least he's consistent in his tardiness.
I'm not convinced that Mr. Johnson is keeping secrets for the right reasons, and in this case, the why matters, I think.
If he's trying to keep his legal filings under wraps so that an adversary is not forewarned, it makes sense.
I would argue, however, that Mr. Johnson may be hiding the truth to avoid accountability to investors, which is an entirely different matter.
Take, for instance, MSX's financial statements. Mr. Johnson presumably understood that he was required to file financial statements for the year ending April 30, 2013. He missed the deadline, and it caused investors to lose their ability to trade. We deserve answers as to how this lapse occurred, and what his plan is to resolve it.
Despite the fact that the CTO began on Sept 10 or so, Mr. Johnson didn't even acknowledge it until Nov 22. He still hasn't explained why it happened. He still hasn't said why MSX chose not to represent itself before at the OSC hearing. He hasn't discussed a plan to resolve it, or what the timeline might be.
The fact that Mr. Johnson is routinely late and deficient in his filings can't be explained as a defensive maneuver to keep his enemies in the dark. I can't see any strategic benefit to delaying required filings... quite the opposite. It drains MSX of credibility in the market.
That's my problem here. I think Mr. Johnson is making bad decisions, and the fact that he wants to hide his actions makes him look even more sketchy.
How about the lawsuits that Brent has loudly announced, and then quietly swept under the rug when lost or dropped?
MSX vs. Fitzgerald in Montana. MSX vs. Tronox. MSX vs. its lawyers in that matter. Washington. Arizona. The RICO case. The criminal charges in Chile. How many more?
Presumably his opponents already know that these cases were lost or dropped. So how does it make sense to keep it quiet from investors?
Personally, I'm not sure there are any "deep pockets" waiting in the wings... but if there are, don't you think that Mr. Johnson's record of hiding the facts from investors might give them pause? If these "deep pockets" are going to find themselves partnered with Steve Davis/Kanco, don't you think they might want to know that going in?
I take your point that secrecy can be necessary in winning a fight, but I think Mr. Johnson is using this as an excuse to hide his failings and backroom deals from investors.
I'm going to beg a difference here. I don't believe calls for information, clarification, or a change of strategy (even if fueled by frustration) qualify as "negativity". It is, in fact, more constructive than simply staying positive and hoping for the best.
I'll make a loose analogy to professional sports. If the Canucks are losing, you'll often hear fans calling for a change of goaltender, captain, coach, GM or all of the above. They're not calling for change because they hate the team. They're not likely to be paid agents of the Bruins, using talk-radio to sabotage their opponents. They want the team to succeed, and they think a change will help.
I think a change might help MSX. Is that negativity?
Brent Johnson has, IMO, failed in so many respects that it calls his leadership into question. The issue that is particularly bothering me at this moment is his secrecy, and the lack of good reason for this secrecy.
Why would it make sense to stay mostly silent on the CTO? How could this benefit the investors? How could it make sense to make secret deals with Steve Davis, but then undermine him publicly by maintaining that there's no relationship?
I'm also quite concerned about the lack of competency Brent Johnson displayed when he allowed a past director with a conflict of interest to negotiate a major funding deal, but didn't supervise the details, resulting a lawsuit large enough to jeopardize the solvency of the company.
If shareholders are right to be concerned about these issues, then how can it be wrong for us to discuss those concerns with eachother?
Without singling anyone out, there may also be a couple of trolls who show up now and again. That's standard in any anonymous forum. So long as the rest of us remain reasonable, I still see the discussions here as a positive thing.
It shouldn't surprise me. Steve Davis sees four long-term active participants who think it's ridiculous that Mr. Johnson is still stringing him along... and he thinks conspiracy.
Or maybe it really is just ridiculous that Mr. Johnson is still stringing Steve Davis along.
Mr. Davis: I think you're a bad business risk. I think your lawsuits are no more than a collection of random thoughts, loosely bound together in an ever-changing narrative that only makes sense to you. I think that MSX's credibility (such as it is) is damaged by any involvement in your nonsense lawsuits.
So there. I've been straight with you.
Has Brent? His public stance on you? No relationship. It may change in the future... or it may not.
As soon as he has exhausted any possibility of your usefulness, he's positioned himself to walk cleanly away from you. His silence discredits you better than my words.
You've pressed the issue by trumpeting a big announcement on December 16. Will Brent stand up with you? Or will his continued silence finally clue you in about what you're worth to him?
A big press conference on Dec 16th, hmmm...
I wonder if this new development sidelines Mr. Davis' planned fact-finding mission to Chile? Or his "intimidation tour" to visit MSX enemies in Canada?
Has Steve Davis finally found a way to circumvent himself?
What does Steve Davis have to do with MSX?
The only reason this is a valid question at all is because Brent Johnson likes his backroom dealings, and doesn't have respect enough for investors to offer a straight answer.
The stench of Steve Davis and his failed business, Kanco, has been hampering the credibility of MSX for years. Going back to 2011, when Mr. Davis charged in to "rescue" the Fitzgerald litigation with a highly suspicious (and now fully discredited) story of a secret agreement Steve had in his pocket since the 60's, it was always a little hard to understand why Brent Johnson wanted him on board.
Yet there he was, writing press releases, initiating lawsuits and signing agreements on behalf of Brent and MSX. They never explained why they wanted this serial litigant and frequent legal loser on the team. Mr. Johnson never clarified a thing. The closest he came was some vague statement that said something like "we don't have a contractual relationship with Steve Davis, but that may change in the future."
Clear enough for you? It kept the investors from panicking about this wing-nut taking the reigns, but was vague enough to string Mr. Davis along for a while.
Then, when things didn't go Steve's way, he began threatening posters here with lawsuits (which he still does occasionally), bashing Brent and JL, and sulked off to file his own (now failed) lawsuit in Arizona.
Phew! Dodged a bullet on that one! Now we don't have to worry about his conspiracy rantings dragging down MSX's credibility.
But that's not the end of the story.
According to Mr. Davis, Brent Johnson reached out to him sometime before the last AGM, and they made a deal. Suddenly, Steve has gone from being critical of Mr. Johnson (appropriately suggesting his resignation on the Mrs. Jackholm matter) to his biggest fan (who doesn't give a damn about how Mrs. Jackholm was parted from her money).
What did Mr. Johnson offer him?
I've asked.
No clear answer. Steve says is was "help" on another one of his conspiracy lawsuits. He later admitted that Brent Johnson "made good" on an old debt for Mr. Lopehandia - whatever that means.
So what does Mr. Johnson have to say about it? Nothing. Not since that lousy PR in 2011.
And this is where I take issue with the argument that Brent Johnson should be given the benefit of the doubt to act in secrecy, to "play his cards close to his chest" and other such nonsense.
Ambiguity is not good business strategy. Hidden deals don't result in trust from investors, current or potential.
If Mr. Davis is a part of his strategy, Mr. Johnson should say so. It would be a ridiculous decision, IMO, but at least there would be clarity. It would be hard to defend, but at least Mr. Johnson could begin defending it.
Hiding it makes you look guilty. It undermines Mr. Davis to the point that he is useless. If he is an asset to this company, start acting like it, and stand behind your dealings with him.
If, on the other hand, Mr. Johnson doesn't want Steve Davis in the business, he should make it clear. Announce an end to MSX's support for worthless US litigation. That should do it.
By sitting on the fence and playing both sides, Mr. Johnson is making a tactical error. He exposes MSX to the disadvantages of Mr. Davis' involvement (his erratic, threatening behavior, his past legal failures, his conspiracy rantings), but gains no advantage.
Mr. Davis is bad for business. Of that, I'm sure. If Mr. Johnson thinks otherwise, he should have enough respect for investors (and indeed, for Mr. Davis) to plainly say so.
Otherwise, I guess the only one doing the talking for MSX will be Steve Davis. Heaven help us all.
Three of my four reasons apply equally to the past situation, if not more so. Just because MSX was begging for a fight, it doesn't mean that it would make sense for Barrick to step into the ring.
Mainland, you make a good point: participants here have very little idea (besides speculation) about what's happening behind the scenes.
But I would also argue that some of what's behind the curtain is being pointlessly withheld.
Take the CTO as an illustration of my argument.
MSX last traded on September 10. It wasn't until November 22 that management even acknowledged the CTO to shareholders. Two months and twelve days to even tell investors what they already know. When Mr. Johnson does discuss the CTO in the monthly progress report, he incorrectly states that the CTO was from October. He offers no explanation for the failing, no update on efforts to resolve it, and no timeline on scheduled hearings or submissions.
Wha...?
What possible strategic reason could there be to keep this information "behind the scenes". It's PR suicide. It makes it seem like he has no plan. A simple, factual statement in early September would have preserved a lot of goodwill.
Unless Mr. Johnson is planning a sneak attack on regulators, I don't see why he should guard as "top secret" his plans to come into compliance.
While I accept your point that participants here are working on scant information, I have to lay some (or all) of the blame for that failing on MSX management.
Why wouldn't Barrick sue MSX?
Good point. I've given it some thought, and if I were strategizing for Barrick, I wouldn't advise a lawsuit for the following reasons:
1) They sued Mr. Lopehandia and won already. He dodged the financial penalty by claiming hardship. So what did Barrick accomplish? Costly litigation with no financial upside, and JL is still mouthing off. Clearly, suing JL and MSX are not a winning proposition financially.
2) On the other hand, by successfully suing Mr. Lopehandia for making false statements, they've already discredited him in the eyes of the investment community. He's continued to rant, and it hasn't much impacted Barrick. Investors haven't discounted Barrick on fears on title problems, nor have major investment dollars flowed into MSX. So if they've already neutralized the threat, why bother rocking the boat?
3) The old expression "Never argue with a fool..." Just by engaging in the debate, Barrick would inadvertently lend credibility to the other side. Better to leave it alone.
4) Well, the fact that they've already shelved the project makes it a low priority to "go after" MSX. Chances are that MSX will run out of money long before ABX even plans to resume the project. Why sue when time is on your side?
This case was never going to be worth anything to MSX, nor was the larger case to nullify the Pascua Lama protocol. Now, of course, with ABX putting the whole project on hold, it begs the question of why MSX still thinks litigation against Barrick is a sound strategy.
Maybe Mr. Johnson has no other trick in his bag than to initiate worthless and losing lawsuits.
My suggestion has always been that MSX should conduct the proper testing to prove the value of any mining properties JL holds title to.
Instead, Mr. Johnson seems only able to throw good money after bad on lawsuits in the US and Chile.
It's a shame to see this utter waste of resources. Lawyers are paying their mortgages. Brent Johnson is paying his. Mrs. Jackholm is losing her home. Go figure.
My opinion?
I'm a bit torn, because I don't want to let my thinking be coloured by my lack of faith in Brent Johnson. However, if I'm true to my gut, it worries me that MSX has clammed up.
It seems to me that if Mr. Johnson felt there was a good chance MSX would emerge from the CTO and continue as a going concern, he would have made some sort of statement to reassure shareholders, and to avoid spooking any potential future investors.
My sinking feeling is that he already knows that there's little chance of coming back from this, and that to make a reassuring statement now would expose him to some liability for misleading shareholders.
What are the other explanations?
My own opinion, I have to admit, is somewhat tainted by my distaste for the way that Mr. Johnson has done his job in the past.
Now I'm looking for some reasonable alternatives to my own conclusions on the following questions:
Why would MSX management choose to remain silent about the CTO and the outlook to resume trading?
Why would they choose to no longer update the shareholders about the company's results and prospects?
Arizona appeal result:
Lower court decision (against MSX) affirmed. MSX ruled to be a vexatious litigant, and levied all court costs.
http://www.apltwo.ct.state.az.us/Decisions/CV20130052%20Memo.pdf
One particularly embarrassing portion of the ruling:
"...the proposed complaint offers virtually no additional factual allegations, and new exhibits attached to it consist entirely of unauthenticated printouts from unidentified websites."
Ouch. I guess the Court of Appeal isn't fond of Steve Davis style lawyering. Please tell me MSX is done having its butt kicked on this lawsuit.
Steve Davis poses as a champion for truth and transparency, but vigorously defends MSX management for operating in secrecy, and keeping investors in the dark.
I have no idea why Mr. Johnson continues to seek cooperation with Mr. Davis / Kanco, as it seems he has very little to offer. However, if you believe Mr. Davis, not only has MSX settled with him over JL's past financial obligations, but now, he's speaking on their behalf. He writes: "They are required to publish a monthly statement and I know that is being prepared and will be published soon. "
Hmmm... how would Mr. Davis know anything about Mr. Johnson's late homework assignment?
"MSX corporate is not obligated to disclose anything", he defends. "Hire an attorney", he challenges.
Wow. If he ever gives up the wing-nut lawsuit thing, it sounds like Mr. Davis could have a bright future as a PR guy.
Mr. Johnson should be updating the investors who paid his salary because it's the right thing to do. The CTO is a significant business event, and he hasn't even paid the investors the courtesy of acknowledging it. No explanation of the reasons. No outlook on resolution. Nothing. It shows a lack of respect, good judgement, and management ability.
Easily distracted, anyone?
All this talk of dissenting directors has nothing to do with the fundamentals. Mr. Davis wants everyone to focus on a couple of shareholders who he says have been "bought off" (by ABX?)... what a load! Does anyone believe this? Isn't it *at least* as possible that some people who have sunk their money into MSX are simply disappointed by poor management?
Still no closer to lifting the CTO.
Still no update for investors.
Still no plan to meet financial obligations.
But ooooh... look that way... a hacked e-mail account... a conspiracy...
Distracted yet?