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i agree that uncertainty,plus continued government deficits will haev tendency over time to drive gold higher, though short term moevs can be quite volatile.current situation of historical high commodity prices and low equity prices creates contrarian buy situation. onalrge companies newmont paying over 4% dividend, hecla mining udner $4 which is a steal, FCGD at under a penny a potential turnaround.
i just came across GROC which i am doing DD on, but great entry price it seems.
I agree that seems a low salary these days for such work, wonder how much time he does spend on the company ?
It seems there are four things CFO can and should be doing :
1. Maintain reporting status of the company.
2. Keep working on getting permit without conditions IF financially feasible for the company.
3. Develop new attitude towards disclosure (a) stop overly-promotional press releases claiming values for assets + stating using NI43-101 criteria when their very press release violates OSC recommended disclosure (b) stop the selective disclosure and provide conservative projections that acually can be met.
- to get more buying they need credibility, short of those with blind hope, market trends do not indicate CFO's marketing is working.
4. Recognize that it is beyond his ability to raise $3 million and get mill operating a few months afterward to meet his projected September date without exceeding a billion shares- therefore find a joint venture partner.I realize this may seeem a subjective opinion, but just looking at the calendar it seems highly unlikely they can raise the $3 million AND have the time to spend it in time for the mill to re-open in september.
You had written that unless financing methods change this company could be down to $.0001.
It would be a breath of fresh air for company to put out a press release outlining a revised strategy and business plan. The current plan hasnt worked, isnt working,and in my opinion the $3 million estimate to re-activate the mill is not feasiable to implement, and even if moderately succesful ( say they raise $1 million but delay opening until 2014), will drive the share price down and down while outstanding shares explode.
Certainly understand your feelings, but the situation is what it is. The company will keep diluting as it has no choice (a) existing convertible on the books (b) a burn rate of $100,000 to $150,000 per quarter. Since it does not seem posible they could get a bank loan, nor raise equity without huge discounts except through convertibles, even with the permit without conditions the share count is going up and perhaps more rapidly than people might think.
And now they state they need $3 million to be raised to re-activate the mill to start operation in September. If raising $100,000 to $150,000 per quarter has resulted in the current share count since the reverse, imagine if they could raise $3 million what would happen to the share count.
Maybe more realistic press releases and forecasts would be a good start, and looking for a joint-venture partner.
Just noticed this company. Gold at historically high prices, junior mining equities low prices last 12 months. 20% of Vancouver junior mining companies facing de-listing, so survivors may be great contrarian plays for the future.So looking for companies that will benefit from this situation.
Assumption of course that mill is almost ready I dont understand how that assumption can be made when company has stated they need $3 million to re-activate the mill. Am I missing something ?
The CFO controls the voting rights, and has a second on the mill, how would you propose " stopping" him ?
As a practical matter company has stated they need $3 million to re-activate the mill. companeis when their share price too low and outstanding shares too high can resort to a reverse split to try to improve financing chances. A I have projected they will end up at least 350 mlllion shares, 500 million + at these prices,by august 31. ( I admit I dont expect stock to jump to $.05+ just on announcement of mill permit, if this assumption wrong then of course my share forecst wrong).
So if in addition they need to raise $3 million, the share count goes up very quickly. What would you propose CFO does at this point to avoid that scenario ? What realistic options does CFO have beyond more convertibles ?
The only alternative I can think of is a JV partner to step in. What would you propose to CFO ?
Well I really do not know how in this internet world just saying something "interesting" is taken for some sort of insinuation, which it wasnt. I actually start with giving anyone the benefit of the doubt, and I think my posts have shown that.I just found it interesting a regulator type would go on record like that.I do thank you for sharing your due diligence.
They said report met criteria , I showed in one significant area it did not. That has nothing to do whether it was filed, and in any case there is no requirement for them to file in Canada(as far as I know). On the other hand if they are quoting from the report material information, they are supposed to disclose that.
I agree report can be amended, but disclosing as they did not a technical error but a conceptual one they have in understanding the guidelines.
Sorry but crystal clear to me what OSC thinks about companies that disclose values of metal in the ground absent extraction cost.
I never expected company to really prepare a report accoding to guidelines, but it is worrisome CFO thinks at this point over-promotional press releases will do the trick.I mean really, they dont own the property, had next to no chance to meet March 6 conditions, and probably not in May either.But they arent the first junior company topromote based on LOI or MOU or option or whatever.
I think we can agree getting the permit without conditions would be positive.
but where would money "flow" from ? New convestibles ? Equity investors at a simialr discount as the convertibles ?
So an official is telling you what his next course of action about the process will be ? Interesting.
For the state to remove the conidtions, and figure out any new bonding requirements and new inspections, I presume that process starts after company meets the conditions , is that correct ?
As you indicate even if they jump through all the other hoops with perfect timing, there is the main financing to consider.
Junior mining companies having very difficult time to raise funding, I doubt the royalty concept could without reserves and mill ownership raise any funds, and I am almost positive no bank in the current regulatory environment could touch this deal, and any equity investor will want similar discounts to the convertible people, and in any case company is running out of time for a September re-activation of the mill. At least they were direct at giving the re-activation estimate so investors can see how unlikely it is company will meet the September re-opening date without 1 billion plus shares outstanding.(500 million I project + whatever $3 million investor would want).Smelter finance companies usually at best finance when concentrate ready to be shipped normally, not development costs.Who knows maybe CFO has something lined up but I doubt it.
So that leaves a JV partner, or an outstanding amount of convertible fnancing.And then 2 months to spend the $3 million-hiring personnel, ordering equipment and supplies, etc etc all in say 2 months after a permit is granted without conditions.
I guess all this could happen, just seems a bit unlikely.
Thanks for your comments which puts things in perspective. I had been focusing on outstanding shares, your indication with convertibles they could end up back at $.0001 certainly is an eye opener.
It seems the best option for company is a partner as clearly if they raise $3 million through convertible notes, share count would exceed 1 billion even 2 billion pretty fast- and is there enough trading volume and probability for a convertible note buyer to take a $3 million risk ?
Interesting.
So if they finish remediation work and get the permit without conditions in June, that leaves July and August to (a) Raise the $3 million(b) spend the $3 million (c) firm up orders to process ore at the mill(d) pass any inspections required. All this is supposed to happen by September ?
-I wonder if $3 million includes equipment that needs to be ordered, and what lead times are.
Based on their outstanding convertibles, and estimated burn rate per quarter and current share price I had estimated a range of 350 to 600 million shares outstanding by August 31, and currently I lean more towards a 500 million outstanding shares prediction by end of August.
How do you see the $3 million being raised ? What would a projected share count under that scenario be ? You had mentioned a scenario for a $.0001 stock prcie, do you think this is possible by this summer ?
Hi Les, if the $3 million needed after permit is approved without conditions, one would assume that there is a priod of time the $3 million needs to be spent.Looking at the calendar, do you believe mill will be operating in September if permit is granted without conditions by June ?
Hi Les, I did give the reasons why I didnt expect a full compliant NI43-101 report not to be filed.
I also gave precise reason of an example of the company not following recommended disclosure,and that does lead me to wonder if they also are following recommended disclosures on resources.
I agree continued reliance on convertible financing will have tendency to drive price down, how much who knows.
Havent heard anything about Sunshine Silver IPO,maybe they are tryng to buy Chester Mining (OTC : CHMN) first, or markets just not ready. Considering Hecla direct cheap at $4 a share, Newmont paying 4% dividend, maybe they are just waiting for right opportunity.
He went into Kimberly Gold big time, it droppped like a rock and Shoshone Silver picked it up for a song. Then he joined Shoshone Silver board,stock also dropped, now a new group has taken over.
He has uncanny ability that whatever company he joins its fortunes turn south.Keep in mind one of main factors that pushed Sterling down was that he led the charge against a major financing in February 2008, appointed inept management in May 2008, and then he became CEO and led company into bankrupt position.
Maybe he had some way to short these stocks, who knows.Think he is based in Nevada, maybe he is also involved in Las Vegas expansion !
Data derived from assembling a report doesnt mean it is a current resource unless sufficient mapping,sampling and normally drilling done during the preparation of the report.I cannot judge from the press release alone whether it is a current resource, judging from company's financial status hard for me to imagine this is a current resource but maybe it is.
NI43-101 reports usually disclosing the sampling protocol, chain of custody issues, and which firm did the assays etc. Again if they looked at how companies typically release NI43-101 type data,their future press releases could be more informative.
Hi les. what I posted was quite specific,ie.that the OSC considers t a "red flag" a company which disloses metal value in the ground without disclosing costs to extract or capex. The issues are (a) that CGFI is claiming reported prepared by NI43-101 criteria which according to OSC it was not (b) protect investors from unreasonable valuations.Yes people can draw their own conclusions and if people wish to believe the value in the press releases without considering costs to extract or the CAPEX required, then free to do so- but OSC specifically warns against this because of long experience with overly-promotional companies.
As far as resource, it may be current or an historical resource,and needs to be classified whether inferred,indicated or measured. Whether NI43-101, JORC, or other commonly accepted standards, the SEC accepts measured and indicated as (a) mineralized material (b) and only providing tonnage and grade.I do not know whether company has done sufficient drlling or had access to all areas of these mines so that it is a current resource, as far as I can see it is an historical resource but I could be wrong.
Since even the company not quoting probable or proven reserves, it would appear quite a bit of work would need to be done to get to reserve status, so ore for the mill depends on custom millng it woudl seem. Since company announced $9 million in "orders", I must assume at the least they have identified potential customers.
If company was more transparent wouldnt be so many questions.
However it is a speculative sub penny stock, very high risks against a potential gain.At least it controls a mill, something many juniors cant claim.I have already given my opinion that the mill will not be re-opening this year at a profit, guess time will tell.As you said if they succeed even at 400 million shares it could command a decent valuation.
I am curious on your thoughts about the $3 million to re-activate the mill, do you think that is necessary before september ? what would that do to the share count ? Or do you think they will JV the whole operation ?
Exatly that is why the company publishing gross value of metal contained in the historical resource is classified by the OSC as a "red flag" without including costs of extraction etc.
I do not doubt that there is historical information from which one can make an estimate of the resource, and presumably qualified into the right category, and under certain assumptions some level of CAPEX can lead to an estimate what potential operating costs may be.
Simply I quoted direct from the OSC what they considered a red flag in disclosures, and pointed out this is in contradicton to company stating report prepared according to NI43-101 criteria.
Chester according to NI43-101 report prepaared by Behre Dolbear has 51 million ounces of silver resources. If valued at even $.50 an ounce for market cap. that means $25 million dollars- chester has under 5 million shares outstanding. Theoretically this means a value of $5 a share in sunshine silver buys them out.
Fantastic but for long term investors. Could be 1 month , could be 5 years, who knows.
I completely agree that they did not state it was a Ni43-101 report but prepared according to the NI43-101 criteria.I believe it is extremely unliely they will prepare and file a NI43-101 compliant report, and unlikely they will file either the preliminary or final technical report prepared according to NI43-101 criteria.SME criteria a lot easier, but even then for a reporting company hard to file such reports without attracting a lot of back and forth with SEC engineering office ( SEC Guide 7 a minefield due to lack of detailed recommendations).
1.However come on, I posted exactly the OSC recommended disclosure and guidelines and their statement that it is a RED FLAG a company that reports metal values in the ground absent costs to extract or CAPEX etc. What could be more clear that they are not following the guidelines ? Wouldnt be so bad except they claim to be following the criteria !
2. Resources - there are also guidelines on using historic resources ( as company has no reserves)I admit I havent reviewed these yet against the guidelines- but I know there are specific guidelines on using historic resources to make economic estimates and projections.
This is just one factor in judging the overall company, and they wouldnt be the first to cut corners because of lack of funds or experience.Seems the bet is they will receive permit,pass whatever inspections required,while raising $3 million, then stock price will go up, and then process at a profit.At least they control a mill which is more than most junior mining companies can claim.CFO certainly has a big job this year !
I agree , wording is that they prepared a preliminary techncial report, according to the NI43-101 criteria. I think wording was to get around issue of whether it really was a Ni43-101 report. But more important is whether it met criteria. I posted exact wording from OSC on one important issue- value of metals in the ground : OSC specifically says this is a red flag and such disclosure not accoridng to guidelines.So I fail to see how they cna claim to have met the criteria ?
I havent reviewed the recommended disclosures re historic resources, and using historic resources to indicate forecast profitability.It does sound positive they have reviewed the economics, and again to their credit they have released estimates to re-activate the mill.
Well would be nice to see actual report. They understand ? I specially posted OSC recommended disclosures and that OSC considered it a red flag a company disclosing metal value in the ground without costs of extraction or CAPEX required etc. How on earth does this indicate they understand ??? The OSC very familiar with unior mining companies, and they would not have allowed that press release in Canada or would have requested a retraction.
Dont get me wrong, I put no value on that figure except as an indication that there is potential, but more worrisome is the lack of understanding of NI43-101 guidlines by CFO. Rice must have some familiarity with the guidelines since if I recall he has had dealings with Canadian companies.
I didnt check but I suspect using historical resources has specific NI43-101 reporting guidelines as well.
I can understand company wnating to put the best spin on things, but in the pre production stage, with a DTC chill, prospect of hudnreds of millions of shares oustanding, in my opinion they need to work on building credibility. Putting out a press release that the OSC would consider a "red flag" doesnt appear the best way to do that !
Thanks. In your opinion how much of this has already been spent ? Do you feel they can raise balance of funds fast enough to meet their projected start date ?
Should be a very very interesting few months.
The Ni43-101 I predict will probably never be released as a final complete report. (a) Too many disclosures in NI43-101 report that are frowned on by SEC (b) goes against marketing by silence routine (c) press release alone shows they dont understand recommended NI43-101 disclosures by the OSC, why open themselves up to show they dont understand the NI43-101 criteria well in other areas? (d) the NI43-101 doesnt establish a value of the project without reserves.
Having said that, certainly would be a great if company disclosed key data and projections on project. CAPEX required, current forecast operating costs, terms of $9 million in orders,timing of $3 million in expenditures to reactivate the mill ( sounds like a lot to have to spend in 5 1/2 months to be operating in september).To the company's credit the 10q did disclose the mill re activaton funding requirements.
missed your last line. I calculated the forecast shares
1. Current shares : Outstanding shares per 10q + shares listed under subsequent events.
2.Quarterly burn rate : last few quarters seems pretty steady at 100 to 150k per quarter, divided by current share price.
3. Outstanding convertibles " net amount on balance sheet + unamortized discount equals face value/ divide by share price less contractual discount.
350 million is assuming that price goes up a bit, 600 million price stays in same current range.
Les brings up logical points that (a) maybe share price will go up (b) re opening the mill should help share price.
However I doubt will have that much effect as the IR seems poor in my opinion , and now we find out it will take $3 milllion to re-activate the mill. ( seems high).( I wonder if that includes dry stack tailings work required by condition to permit ?).My forecast shares does not include that $3 million.Plus Les rightly points out, and my error, that my understanding company was projecting mill to be profitable was incorrect.So that means mroe working capital after August 31 to fund growth in mill operations if it is operational by then.
I welcome any comment if my assumptions I am using do not appear reasonable, but 350 million appears to me as the very low end possibility, I woudl hazard a projection 500 million appears more likely than 350 million shares otstanding by August 31.
Wish we had more information on the $3 million, that seems very high especially if they are maintaining projection mill will be operating by September.
well not that many times, but i am just trying to estimate where company will end up- and frankly if my logic incorrect certainly would other opinions. these are just projections,as les says if price goes up less shares to be issued, and some people think the marketing by silence routine until permit granted is best strategy.
so anyway i will study 10q again this weekend, but 350 to 600 million is my current projection, maybe 500 million more probable than 350 million shars outstanding. Look at the growth in outstanding shares since the reverse. CFO said reverse would help shareholders and company,I admit I fail so far to undestand how it has helped shareholders. Maybe it did allow company to issue more convertible notes so in that sense helped company.
well last time I mentioned possibility of another reverse this year I was critisized by supporters strongly that this was bashing the stock, and by the other website saying I was Cfo preparing the market for another reverse. So I cant win making any comments about a potential reverse .
i do think joint venture may be only reasonable option for company if things dont go as planned.
You are right no one falling all over themselves to buy shares. But no you are wrong, telling select people there will be news put out soon is a violation of fair disclosure rules, just look them up and recent SEC cases. Now whether this applies to non reporting companies may be a grey area.Before you claim it isnt a violation of the spirit if not the letetr of the regulations and court cases, with respect , you may wish to look them up first.
I am not stating that BTG knowingly has put out press releases knowing they would never complete the numerous deals they have announced successfully, but certainly there is no way BTDG can operate with no money 5 , 7 or 8 or how many businesses they claim to be involved with. Mortgage lead generation- what evidence is they are generating mortgage leads ?
I do appreciate your sincerity that no matter what lack of sucess company has you admit you are are just gambling future will be different.
With all due respect that isnt the point. Read about any insider information case and you will see this is exactly what the SEC is aganst. May seem like nothing at this point, but just another example why BTDG performs so dismally.
Yes, fair disclosure requires dissemination of news positive or negative to the market at the same time.Not everyone reads this board, so it gives an undue advantage to some shareholders at expense of others.Just another exampel fo how CEO doesnt understand the rules for reporting companeis, and for non reporting companies generally good pratice to follow same rules. Anyway doesnt matter as hardly anyone beieves the company any more.
I do admire your optimism after all these years though. Seems regardless of negative results you stay the course .It will take a miracle for BTDG shareholders to make any money.
Th market for financing junior mining equities is terrible right now, cant imagine this company could raise $5 million in equity absent (a) fully permitted mine (b) secure source of ore (c) how will they deal with other liabilities ?
A joint venture may be only option at some point if they get a permit and source of ore nailed down.
1 billion shares this year ? I know seems a stretch, but if they could end up over 600 million at current prices and their current burn rate through August 31, if they dont get permit or if market then focuses on ability to raise capital to re-activate mill, maybe time for CFO to re-think strategy and planning.
I will give credit to CFO for providing an estimate for re-activating the mill, at least now investors know what is required and how many shares could be issued this year even if things go accoridng to plan.
I guess you have more faith than I do that the permit will be granted by that time frame, but if they say it takes $3 million to re-activate the mill, then how would they be producing revenue ?
The permit being granted is a positive if it occurs this year, but will market respond positively, who knows.
Sicne they dont have established reserves, nor as far as we know ad efinitive arrangement for ore, and they have a terrible balance sheet, not sure how easy it would be for them to get a loan.
As Les pointed out seems they continue to get convertible financing which keeps them alive, and I guess company like some shareholders they believe they will get the permit by September and this will have an effect on the stock.
I do think equity financing through a PPM will be very difficult with a DTC chill, and at what price - would you pay full market if you knew convertible guys could convert at such a discount ?
In any case so very roughly looks like they will be at 350 to 600 million shares by August 31, I used current share price for 350 to 400 million share estimate by August 31.
I appreciate company gave financial forecast to open the mill, though $3 million by September in additional convertible financing seems a bit aggressive to say the least. This would give a very large outstanding numebr of shares, wonder if they meant $3 million over time ? Wonder what others think- based on this forecast I cant see mill reopening at a profit by september ?and if not, will share price decline further in the interim, driving up outstanding share levels even higher ?
does it concern you president of public company tells one shareholder and not others some news is coming out ?
Just curious, what would be responsible dilution ? I cant see them raising less than $150,000 per quarter, nor price rising appreciably unless mill is operating at a profit , at the least.based on that seems the outstanding share count will be 350 to 600 million bu august 31 depending on what share price ones forecast.
Interesting though DTC chill doesnt seem to effect convertible note fellows.
My figure was conservative on the low end at 350 to 400 million shares ,using current share price. Using the discounted amount figure would be over 600,000 million shares by august 31, 20123.
didnt someone post that a forecast at a billion shares this year was insane ?
154 million = 10q plus subsequent events
$150,000 for each quarter through august 31/ forecast share price
conversion of remaining balance of convertible notes /forecast share price
Yes 10q answered some questions.
1. forecast shares : based on outstanding and subsequent shares issued they are at 154 million shares. looking at ending oustanding convertibles / share price less what they say has been issued for convertibles, at current share prices that would be another 100 million shares to be issued. if they use up $150,000 per quarter ( which is not out of line with their quarterly cash needs per last several filings), that would be another 53 million for the next 2 quarters.
- So my estimate before too low, now I project on the low end the company will be at 350 to 400 million shares outstanding by august 31.Do think I am too low still ?
2. costs to re-activate the mill : yes they updated to their credit. $3 million if i undesrtand correctly (though maybe some of this can be staged). so i guess question is whether they can (a) issue convertibles for this amount by august 31 (b) if they are conservatively forecasting meeting conditions for permit by august 31, then when does this $3 million need to be spent to re-open the mill .
- so i stick by my forecast the mill will not be re-opened by september at a profit, the company seems to be saying as much as well.
You have pointed out that with the company needing funds, and the continued issuance of shares to satisfy the convertible notes, that the supply of stock is increasing . The marketing by silence plus ( in my opinion) lack of transparency doesnt give people much incentive to buy. Judging from continued volume someone is buying, and price hasnt dropped as much as one may have expected.
I agree short term price fluctuate maybe not meaningful, but price drop has been fairly steady over last 5 months. At what point do you feel management needs to address the situation ? If some feel it is still probable for mill to re open in 5 months at a profit, why is the stock price not firming up in anticipation ? Does management have responsibility for long term price performance ?
Yes I do expect some answers from the upcoming 10q. What better opportunity 5 1/2 months before the projected re-opening to provide some reasonable comfort to investors.I admit I dont expect mill to reopen at a profit this year,but if they are maintaining that projection why not update shareholders ?