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I have had my doubts about the re-opening date as (a) I doubted they had cash to meet all the conditions (b) even so their will be inspections required certainly.(c) doubt whether they would have cash to re-open which was reinforced when they finally came out with the $3 million estimate.
I cant judge timing on meeting the conditions from a processing standpoint,and to the amount of bond that will be required. My brief reading of the permit documents did make me a little sceptical whether the original application was done as it should have been- the comment about the lack of a particular baseline study ( something pretty basic) jumped out to me, but I do not know enough what is standard in Colorado.
I dont know whether it will drop immediately next monday, but if they are using convertibles again, we should see an 8k next week on a new convertible deal ( unless of course they or others concoct some reason why a material event shouldnt be reported).
Or they could be throwing in the towell in some fashion.
I was referring to their wording that certificate had to be exchanged.
I dont know exactly how DTC chill works but I assume the following unless someoen can give better expanation
DTC/CEDE at some point accepted CGFI certifictes, once this was done brokers would debit or credit their accounts at CEDE so everything ( supposedly) balanced,and total there balances to transfer agent record.
Then at some point DTC imposed a chill on FGFI stock,meaning no additional deposits accepted, and at that point any trades on new shares had to be in certificate form between brokers. So all these certificates need to be replaced.
I have no idea how old CEDE balance is handled between brokers, maybe some system that still allows some electronic trades up to that balace.
If certificates need to be replaced, this wil take some time one asuems.
I am not sure FNRA get's involved any more than they approve or not the reverse.
Well I had assumed anyone buying CGFI stock relized it was similar to buying a lottery ticket, maybe with slightly better odds. Absent much indication of probability, some people believed a CFO with little experience in this industry had probability of meeting his projections- and same people projected valuations based on the rather interesting concept that one doesnt include expenses and CAPEX into financial projections.
Will be interesting after the reverse whether a new flock of buyers with similar approaches start buying the stock, or if afetr 2 reverse splits it proved more difficult for CGFI.
So does anyone now think CFO will meet his stated projections ( still on the website)for when mill would be operating ? Will price drop to $.0001 ? Who on earth is still buying right now ?
One thing for sure, an interesting company to follow ! Lots of tax losses for people this year !
I still dont know where these convertible note holders placed their stock with a DTC chill ?
I find it curious wording that certificates need to be replaced- this could really limit the float temporarily after the reverse.I dont know but how does this effect DTC ? If an existing DTC chill but some shares had already been placed with DTC from years ago, what happens now if those certificates with DTC now need to be repalced ? Or does this reverse have something to do with the DTC chill ?
Hi Les, I cant imagine any sort of serious financing the CFO may have lined up except for more convertible debt.
Well maybe the marketing by silence routine hasnt worked,so maybe a new path might be in order. Companies communicate via press releases concerning bad news as well as good news all the time.
Current shareholders have been wiped out after 2 reverse splits,and company has not achieved its objectives after some time. Hard to imagine even the CFO believing the same path forward will deliver diferent results.
Nothing new to say ? Well, by now I do think CFO has pretty good idea whether he will meet his projections according to their fact sheet on his website, and I do believe something prompted this second reverse.
I agree going private isnt likely especially in this type of business that has to rely so heavily on speculative capital in the early years, and no bank will touch this company.
They are in same position, need about $100,000 to $150,000 per quarter and only option apparently available was convertible notes.Something prompted this reverse as CFO probably could have kept this going for several more months. Looking at timing of when convertibles due that could have been converted it may have been a timing issue-may they didnt have new convertible note holders willing to step up to the plate and hold for 6 months , so CFO felt this move was necessary. Or (incredible as it may seem) he actually thinks he can do a private placement for $3 million.Convertible note holders usually dont go over 5% ownership, or if they do keep under 10% so they arent restricted on how much they can sell per quarter- so his options actually a bit limited.
A JV with better capitalized company may be the only option for the company, but after 2 reverse splits in less than 12 months wont help current shareholders( nor with this track record future ones either).
Terrible PR/IR, CFO just avoiding communication or putting out a press release-something prompted this move, so why not update the market ? What is he afraid of ? Market cant be worse than $.0001.
Well you are welcome. NEM ( like HL) a definite buy at these prices, and divdend as well ! Could go lower, but im medium to long term should go higher.One to accumulate I think ove rtime.
Could be. I wonder if CFO realizes he needs a new path, or will continue down the same road.
I have no idea what was the "consideration" given for teh B shares, no who approved nor if Colorado there are dissenter rights.
Shareholders just wiped out after 2 reverse splits,something must have prompted this new reverse split at this particular time.Will be interesting what new story company comes up with.
Highly agree at this price point and dividend great core position as play on Gold.
If I recall that was a Rotchsild quote no ?
Well first of all, I consider this board a place to learn whether good or bad aspects of a company. I do not think one should be uniformly positive or negative, just hopefully objective and relevant.
Foregtting that the overwhelming majority of penny mining stocks lose money in the medium to long term- but occassionally they can deliver stellar capital gains. So kind of like junk bond theory- many will default but on average that default risk is offset by a higher average yield overall. So looking at companies this can be worthwhile for the one time a superlative play is found.
Hope I have answered your question. Maybe I have invested in too many junior mining stocks so I am a bit jaded, for example the idea this company can raise $3 million based on its track record seems a bit far-fetched to me, but who knows !
Have to admit also this board is interesting- secret marketing and finance plans being developed, contractors working for sub-penny shares, CFO taking a second on mill and controls voting stock, claims a reverse in shareholder interests. You have to admit never a dull moment on this board !
are you saying hecla would ship from greens creek or lucky friday where thay have their own mills to a mill in colorado ? sorry i am just not understanding.
If you talk to any banker they will inform you very quickly considering industry CGFI in most banks would not lend to it, and in general banks have such regulatory ressure many loans they could have done even 3 years ago they arent doing. In addition looking at the company's financials, track record, lack of collateral, amount required, it doesnt appear this would be a good business proposal for a bank.
On the other hand as you say maybe there is somebody who would lend to CGFI under some conditions- I cant imagine it but I guess one cant say impossible.
But doesnt help any shareholder prior to the past or current projected reverse.It is interesting no matter what the track record of this CFO and company, there persists the belief that there is a reasonable possibility that they wlll be up and running and money will flow to them .The whole mining industry suffering right now, even profitable companies with steady cash flow. If money not flowing to solid operators, why would it flow to CGFI ? Am I missing something ?
Just went to their website, clicked on C9lorado property. It states it is an exploration project ad does not indicate it is producing. What would be soruce of informaton they are producing there ?
None of this could help current shareholders.
1.Hecla
I like Hecla,one of my 5 favorite mining stocks, but keep in mind they are professionals and conservative. I assume you are referring to their Creede exploration projects ? Those arent producing as far as I know ( havent looked recently).
Theoretically if POW mill within proper transport distance to be cost effective ( I havent looked), and could process their ore, then if Hecla felt it would be permitted one would think they possibly could be looking for a deal.As far as I know Hecla not producing in Colorado and probably a few years away. They have the last two years been investing in other companies, though I couldnt imagine them investing in CGFI.
2.Bankers
I have outlined in my prior posts that it is extremely unlikely a US bank would lend to CGFI even wth a permit approved, and if a bank were to lend it would be under two circumstances (a) a specialized bank that would require a bankable feasibility study (which they cant affordand doubtful properties ready for one yet)(b) maybe with smelter contract some short term working capital financing available. I am completely unsure why anyone would think a bank lends to an operation like this.
All these what if questions would be very interesting if there was any probability they could occur in the next 12 to 24 months.
Face it the track record of this company is if CFO keeps doing same thing he will get the same results.
Definitely a bargain at these prices, IMO
Why wouldn't it happen? I seem to recall some felt after first reverse there wouldn't be one this year,and got rather bothered the suggestion it could happen.
To say a reverse wont happen again means something has changed fundamentally with the company that will (a) create a situation where demand for the stock will exceed supply (b) that company has options for financing besides convertibles (c) management will do things differently going forward. Do see any evidence that these three conditions would be met ?
I suppose at some point we will learn what prompted this new reverse at this time. Since they had continuing volume and unissued shares, I do not understand why they didnt wait until the fall.
With all due respect it seems my email was not understood. Quoting metal value in the ground is meaningless unless one has also an estimated of costs to extract and process, in terms of estimating value. I guess I do not know how else to explain.
Depend how the dollar collapses- all of a sudden or over time, and of course how other currencies do. My own prediction is considering the continuing debt and deficit of the government ,but the immense resources treasury depatment has,the collapse will take time.Gold and silver will rise and eventually the junior mining equities will instead underperforming metal price will outperform it- and that will be when signficant capital gains will be made.At the same time regulatory requirements being imposed by DTC, FNA, clearng hosues ,and lack of capital hurting junior mining equities- so those left standing are ones that will benefit.
One other factor is forgetting the US, arabs,chinese and indians seem to like gold and slver as an investment-and they wont hold dolalrs forever !the british thought their currency woudl remain the world's reserve currency forever but that changed. so conceptually no reason, over time to expect dollar will retain its position.
How soon to $.0001 ? Is anyone here still buying ?
Guess I have to admire the continued optimism ! In response :
- no ,the DTC chill s best I can make out ( I have asked several people) has nothing to do with the merits of the business- it is DTC's determining ( correct or not) of the risk factor of it getting involved in facilitating transactions involving this stock. I am unsure where any one would get the idea that DTC was determining which stock to "chill" based on merits of every particular business.
- I am also unsure where the idea of billions in assets comes from. Granted the replacement cost of the mill surely exceeds what the sales price was. But the press releases announcing hundreds of millions of dollars in metal values in the ground are not an indication of what the net value might be. This shows by the way exactly why that this sort of disclosure frowned upon.It takes millions of dollars usually to get a property to the point where a producton decision is made, this usually a multi-year process, then one has to raise the capital for final development work, and then working capital.So if company announces a few hundred million dollars in "assets" , one has to discount CAPEX required to get even a ballpark Net Present Value.
However I try to be objective, please tell me what I am missing that would lead one to believe they have a billion in assets ?
exactly- dollar goes down, gold goes up, people start demanding payment in gold.
I guess the other question is do people after recent events stil believe the permit without conditions will be granted before September ?
I agree dollar is on a path to a gradual or sudden collapse, and gold and silver good hedge against that eventuality.
So if there is money to be had from a case, from where ? Certainly not the company ! Lawyers take cases when they can make money, not readily apparent at least to me where they would make money.
Sure I agree mill up and running with mill feed, at these gold prices has value. But first one has to get there. Company has stated $3 million to get mill up and running. Unknown availability of mill feed, or cost(capital) to extract it ( after purchasing) nearby properties.
I am not sure if idea of CFO being concerned to alert investors follows the pattern of this company. I think though you may be correct CFO took this move because he believed it would turn the company around. Based on his track record it would not be unfair in my opinion to question his judgement. I am curious what their next press release will be, in particular as with last reverse split if he states this is a good move for sharehlders which if I recall he stated.
In my experience 2 things
1. investors usually prefer to buy high, or stock going up,
investors usually like to sell low
2. many investors do not read SEC filings, nor do all ivestos look at chat room postings and just speculating when a stock looks cheap, and website looks nice.
it is stil also mind-boggling to me stock hasnt hit .0001 yet.
Speculative buyers always seem out there somewhere, look at all the posts about "bank financing" possibilities. Show this balance sheet and income statement and website to any bank manager, they will tell you in a minute they couldnt finance absent other cash flow or collateral-yet people persisted in believing that was possible. People persisted in thinking dilution was manageable and mill would be operating in September- even though existing convertibles and requirement of $3 million showed clearly outstanding share count would growh quickly in that scenario.
Who knows. I am looking forward with curiosity to company's next announcement. And people still buying the stock !
Why would any lawyer take on the bother of a federal class action lawsuit when there is no money to be made ? The mill has a first and a second against it, so what would be the objective ?
Better chance would be a state action that neither CFO nor company could afford and may make a settlement offer quickly as expensive to defend, in particular the circumstances around the authorization of the Class B shares and the second granted on the mill could raise some questions at state level.But again, if no money to be made what lawyer would take such a case.What would shareholders gain- a dividend of shares after the reverse ?
Company has already said it will take $3 million to re-activate the mill, then for mill feed from nearby mines who knows if many additional millions required.That is why this operation in a pulic company, to raise speculative risk capital- no bank will touch such a situation.I am not saying there isnt value in controlling a mill, and some value in properties that have past indications of production and resources, except of course company doesnt own those properties ! There is a simple reason these type of ventures are in public companies, too risky for private investor usually.
Face it, existing shareholders are wiped out after two reverse splits.
Unless there is some new magic rabbit pulled out of the hat, company probably will limp along,and eventually cost of reporting will lead to a de-registration of the securities in 6 to 24months. Just a guess.
Certainly will be interesting after the reverse what the new "angle" is for CFO to generate new group of buyers of the stock.
One reason for a reverse split is to get the price to a range where a different class of investor might invest direct in the company OR get a brokerage firm to accept its stock. This would appear to be a bit of a pipe-dream considering the experience of the last six months, and the company's track record of using convertibles.After 2 reverse splits in less than 12 months, would you buy stock that you had to hold for 6 months in this company ?
Good point ,guess I got a lot to learn about internet community- but I admit it kind of bugged me to be jumped on about pedicting a reverse which I thought was logical prediction .Anyway past is the past.
Curious to watch now , the jump in shares was rapid, but I guess must have had something to do with the s8 filing or last of convertibles. As far as the increase in the market it can take a few days, especially with DTC chill, for shares to be able to hit the market.Somethings up but I cant think what at this juncture.
I am fascinated why people are buying before the reverse, and also waiting to see what spin is given by company in next PR.I assume CFO wont say this is good for shareholders second time around !
The CFO chose not only the financing path but apparently also in charge of the IR and strategic operating decisions.Who else would be responsible ? Once they chose the CD route, writing on the wall another reverse eventually coming absent some changes at the company, IMO. I hope those who were so annoyed at talk of another reverse werent stil buying last few months.
Should be interesting the continuing saga of CGFI and what happens over next few weekshe. Something sparked this sudden reverse. I cant say "I told you so", as I thought they woudl get up to 600 million plus or so before next reverse.
No law against bad management. However it is rather astonishing that they made the statement of increasing the authorized the day after the reverse ! As far as I know they have to reduce the authorized if they do a reverse if they are doing by "majority" consent,i.e. class B shares. So they do that, then wait 1 day and increase the authorised back up to 1 billion. Hardly will give comfort to the DTC to remove the chill on the stock IMO.
I really wonder if they filed an s8 on 100 million shares which broker accepted the stock.
Incredible there is still buying before the reverse.
The "real" value of the company is either (a) what the market says it is worth, but there can be market inefficiencies (b) what the Net Present Value (NPV) is.
Since we only know estimated cost of getting mill on line, which is assuming they can (1) get a permit without conditions (2) raise $3 million, we do not know forecast current operating cost,nor CAPEX to develop ore from neary mines and finalize deals with them. The $ value assigned to metal in the ground is almost a useless number unless one knows forecast cost to extract and CAPEX required.So very had to even ballpark the NPV.
Finally what is management track record in achieving objectives,maintaining shareholder value ?
I guess if you think there is value here not counting capital needed to realize that value, after 2 reverse splits within 12 months,would you invest $3 million in this company ? Would you invest without the leverage of buying convertible note instead of straight equity ?
They tried one reverse, didnt work, wonder what the plans are now after second reverse ?
Guess people can hope all they want, but I dont see mill operating at a profit anytime soon.IMO
I referred to timing of reverse as interesting especially in relation to s8 filing.