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Don't expect a permit decision until June or July at the earliest. Although, they may announce sooner that they've completed the requirements and are waiting on the DRMS decision.
Perhaps! I'm not sure how they define "non-qualified". Piesold might fall under Accounts Payable as a corporation. I suspect they will be getting more than the $70k in stock allocated here.
The Stock Compensation plans were revised to authorize another 50 million shares for employees and 50 million for consultants and advisors (100 million total = about $140k at $.0014/share).
Not unreasonable IMO
Here's the link
CGFI SEC Edgar Search
Grossberg bought 4.3 million shares on 03/06/13 for $645,000 at $.15/share (the previous day's high). The shares have not sold higher than $.14/share on any day since. He's not listed as an officer but as a 10% owner. Larson, the CFO, spent $5,400 for 60,000 shares on 3/25/13. The pps reached a high of $.092/share on that day but haven't been that high since. These guys are looking at big time losses right now.
It hasn't posted on the Hondo site yet but you can see the fillings at:
SEC Edgar Search Results
Make sure to check the button to include "Ownership" if it isn't already checked.
I have my doubts too. But why would a director risk an investment of $645k if he knew there was nothing in Hondo worth buying?
Strange filings today. Several directors were awarded millions of shares back in early March. One paid $645k at $.015/share on March 6 for an additional 4.3 million shares. Maybe there's something real here?
It might get well past $.04 or $.05 if you would quit reminding the world every five minutes how much the stock has gone down and implying, with no proof whatsoever, that management is lining their pockets. What are you (and several other people on this board) trying to accomplish?
JMO
The filings represent snapshots in time. At that time, the company was dormant but not a shell.
From the 4/11/13 PR ...
I'm not quite as pessimistic about the options as you are Bruno. Keep in mind that as of last week we were still at only 150 million OS. If they can get the unconditional permit (and this seems possible without much more diluton) then a number of possibilities open up.
1) A royalty trust or sale of preferred stock based on smelter royalty from a permitted mill seems like it could be attractive to investors. If you're projecting $50 million + per year in revenue can you afford to pay $5 million per year in dividends?
2) A permitted mill will have a higher appraised value than one with a CD order. Banks loan on appraised value as collateral. I believe Guyer was projecting the market value of the mill at about $12 million (assuming it had a full permit). If you had a $12 million home and a job offer that paid you $50 million +/year do you think you couldn't find a bank to loan you $3 to $6 million.
3) With a permitted mill, convertible stock with a 2 year conversion limit (or straight equity) combined with some smelter royalty could be attractive to an investor or partner.
If most financing options were dependent on the mill permit, none of them could be finalized or announced until the permit was in place.
Speculation, speculation, speculation... No one knows anything. Guyer has had all winter to think about financing and they're still targeting the end of summer to get the mill opened. Let's see what he comes up with. All we're doing is talking ourselves into a panic.
Royalty trust, partner, bank loan, merger, convertible with delayed conversion - there are plenty of options out there. No one here knows the complete financial picture.
That just proves he's not trying to rip you off Mod. I'd have a hard time keeping a roof on my head and feeding my family on that salary. When was the last time you worked 2 years for almost nothing.
You can disagree with what he's done but how could you have done better? Seems to me he's focused on keeping the company going while getting the mill opened which is what his job should be right now.
Your not making any sense Mod. Why would Guyer want to "create a dilution machine"? There's no indication he's profiting from any of this. The only way he can make any real money is to get the mill up and running. He needs $3 million to do that. He's doing whatever he need to to get that done. I see potential ways to do that without an RS but there may be reasons that these alternatives are not possible. If that's the case, the only alternative would be to sell more shares and trash talking Guyer can only result in a lower pps and won't help us make our money back.
Hi 567, just wanted to add my own thanks for your DD. Good piece of work.
I agree. They can't keep relying on covertibles. It may be enough though to get them thru the permit approval. There are a number of alterntives for raising the three million once the permit is approved, e.g. selling smelter royalties, forming a royalty trust, taking a partner, merging, bank loan using mill as collateral (perhaps a local bank would be more inclined to invest in the community), etc. For all we know, Guyer may already have a verbal commitment for funding dependent on his getting permit approval.
Everything depends on how creative Guyer gets with the financing over the next few months. The pps could be .0001 or heading toward $.50 by the end of summer. If they're still dependent on immediate discounted convertibles it will be closer to .0001 On the other hand, a verified NI43-101 could also turn things around.
The only thing keeping them from meeting the schedule is money (assuming the DRMS doesn't sit on it's decision too long). If they can complete the remediation work in May, they can conceivably get a decision by June or July. I'm sure planning must be in place and much of the prep work can be completed even before the permit is granted. If they didn't think a September start date was possible I doubt they would be targeting it.
Hi Bruno. I'm mainly objecting to your use of categorical statements regarding the NI43-101. To go from (to paraphrase) 'they've made some statements about value of minerals that should make one cautious' to 'they will never be able to produce a proper NI43-101 report' is a giant leap. All CGFI has said is that they are preparing NI43-101 reports and that, so far, based on the information they've gathered in conformance with the requirements for those reports, this is what they've found.
To say that you don't have all the information you need to verify that they're not using historical information is silly. The report isn't complete! When they issue the report you'll presumably have what you need.
As far as the 3 million to activate the mill, I'd say they need to clear the permit first. I assume most of the activation work can't really start until they have an unconditional permit in hand. At that point, I think some more traditional means of financing might be more feasable. Right now, the OS is still pretty managable. However, if they keep relying on convertible debt which can be converted instantly at a discount, we'll probably be back to a pps of .0001 pretty soon. I don't think there's enough buyers to soak up all of the shares. If that happens, I'm afraid some of the worst case scenarios on OS may be on the horizon. The next two to three months are critical. Let's see if Guyer can pull some creative financing out of the hat.
The data cited by Johnnie from the CGFI PR is not "historical data" but data gathered in preparing the report.
A Royalty Trust might be the route to go.
I don't think anyone forecasted a profit by September, only revenue, which I would say is still on target based on what I've read so far. To say that the permit should be granted by the end of August doesn't mean it will necessarily take that long (we could see it by June or July).
Your OS target seems reasonable based on the diluted pps we currently have. The real variable here is the pps. Will it rise substantially once the unconditional permit is granted? Then, how many more shares will it take to raise the $3 million needed to open the mill or will they then be able to qualify for more traditional financing (e.g. a fully permitted mill should have more value than one with a CD order or maybe they can get a loan based on a promise of smelter royalty or selling preferred shares or...).
It's a little bit frustrating. There's nothing wrong with this stock that an infusion of about $6 million couldn't cure.
They used $52k from the Delaware Partnership this quarter and another $52k last quarter, so they should still have $325,000 available from that source and another $47k from the first New York Investor and, it appears, another $246k from the Alternative New York investment firm. $618,000 total available
I'm sure the next 10Q will answer some, if not all, of your questions. What I don't expect is news that the unconditional permit has been granted or even that remediation work at the mill is complete. I'm just trying to make sure people consider the physical limitations winter weather has had on making significant material progress since the last 10Q. Mod, Bio, and the rest of the stock trashing crowd will still be crying about how nothing gets done. They'll probably have at least three more months to do so even if the rest of us see some progress.
The pps may be a lot lower if you and your buds keep trash talking it. I don't see what you're trying to accomplish repeating and repeating and repeating ad nauseum how much the stock price has gone down. Do you think anybody here missed that???
Just a word of caution on the next 10Q. I'm trying not to expect too much. We should get some info on the financial situation. However, due to the winter weather they may not have made much physical progress on the mill. I think he following 10Q due in July will be a lot more critical and revealing. That's when the mill permit should be approved.
Well said AK! There's been too much pontificating going on.
I've been buying CGFI on Scottrade for two years. Bought 20k shares today at .003 (I now have 1.14M at about $.03 avg cps). Morgan Stanley cut me off last summer around the time of the RS. I still have 12k shares there but can't add any new ones.
Scottrade works fine too. I got shut out in my Morgan Stanley account.
Sorry if I was a bit tough on you but I guess I was reacting to a number of posts lately from people like yourself who have lost money and are letting off steam. I feel bad for evereyone, including myself ;o) but trash talking the stock at this point is counterproductive, especially now that they seem close to being able to open the mill and need to raise money to get it done.
GLTU
Les
If you'd actually read the post you would have seen that I stated that I'd been following the stock for 2 years. I discovered it through my own research and didn't know about this board until last December.
It was a 5000 to 1 split and yes, I lost money too. I'm currently down about $35,000 after over 2 years following this stock. Yes it sounds like sour grapes. The stock market is a crapshoot. If you can't take a loss, you should stay out of the market and keep your money in bonds or CD's. Never invest more than you can afford to loose.
Junior mining companies are risky investments. Most loose money. Few of them hit it big. They have to sell stock to raise money for acquisitions and operating expenses. At 35 billion OS it was pretty obvious that they would need to do a reverse split. The only question was when and how bad. The current OS is around 125 million. There's a good chance that if they complete their business plan without too much additional dilution that this stock will see some enourmouse appreciation.
I have no reason to believe that the management has done anything illegal or acted with anything other than good faith and bad luck. If it makes you feel better to blame management, do so and move on.
If they could document on the 10Q what they claim on the fact sheet (i.e. that their assets are worth $16.6 million ) and assuming their OS is at about 125 million and that they have no more than $5 million in outstanding debt, then their book value should be around $.09/share. Add some speculation to that and I wouldn't be surprised to see $.20/share. However, if they keep issuing new shares that can immediately be converted as they have been doing, this puts significant downward pressure on the pps that can only be offset by adding more investors.
I'd personally be happy if we could just get back up over $.01/share and stay there until the mill permit gets unconditionally approved.
They're definitely raising funds. The question is, what is the money being used for and how much more do they need before they can generate some revenue. As I've said before, 200 to 400 million OS can still result in at least a $2 to $5 or more pps by next year if they look like they can meet their revenue projections. My biggest concern right now is that they're running out of buyers. They've had to raise money so quickly that there haven't been enough investors to soak up the supply of shares hitting the market. Consequently there's been a huge drop in pps. Due to this fact, I'm more inclined to agree with you that we might hit 200 million plus shares by year end.
A year ago they announced their intent to merge with AMNP. This was intended to solve this problem by bringing in several thousand more shareholders. Unfortunately, AMNP got a better offer and their pps is now about 300% higher than when CGFI was trying to get a deal.
I don't think the $9 million in orders is firm in the strict sense. For one thing, the price of ore (gold, silver etc.) fluctuates too much for a number like that to be firm. I suspect that in reality, Guyer has something more like gentlemen's agreements with several mines in the area to send him a certain tonnage of ore once the mill is up and running. Perhaps, also, some of the money being raised right now is going towards activating one of the mines.
The revenue projection for this year is not that high. It wouldn't require a large amount of ore to meet it. A producing mine in the area could probably supply enough to get them started. Keep in mind that they can start stockpiling ore at the mill at least 30 days before the mill actually opens.
Here's a link;
CGFI Level 2
The last couple of days have been really quiet with low volume. MM's aren't dumping shares and pps has been inching up. Perhaps it's wishful thinking but maybe CGFI has raised all the cash they need for a while.
The Silver Wing Mine was listed as one of the sources for the $9 million in orders in some document that I reviewed during my DD along with the Gold King and several other local mines. This was before they announced they were purchasng the Silver Wing. However, after searching extensively I can't seem to find it again. You can research the PR's for June 24, 2010 and June 22, 2010 and they claim that processing will begin within 45 days of re-activation of the mill. Also, when the estimate of $9 million was announced, Gold was trading at about $1,255/ounce. It's currently at about $1,550.
I think the $9 million figure is probably out of date but I have no reason to believe that they will be able to line up sufficient orders from local mines to meet their profitability projections.
Hi Ak, several people have been raising expectations about the 10Q coming out next week. I just want to point out that the 10Q's have been coming out anywhere from 35 to 55 days after the end of the quarter. That could put it out as far as April 25. I hope that we see it by the end of the week but I don't want everyones hopes to be shattered if it comes out later.
I appreciate your posts as well Bruno, although at times the repetition gets a bit irritating. Folks here are a little hard on you at times but your comments often advance the conversation and force some DD discussions that are probably very helpful to newbies on the board if nothing else. I try to balance some of your assumptions with counter assumptions but the truth is that right now neither of us knows enough to make definitive statements until the next 10Q comes out.
It could very well be that they don't get the mill opened by the end of the year. There are still too many variables that can throw things off schedule. I suspect that this is a primary reason that management is being careful about their statements. Yes, I think they are being conservative. They could be releasing a pump PR every week but it seems to me that they've been throwing us a bone every so often just to keep us interested. We haven't had a PR since 2/14. That hardly seems like a company that's trying to play loose with the facts.
As far as funding goes, again we have no way of knowing what's going on behind the scenes. The SEC has been pretty lax about enforcing reporting rules on penny stocks. I don't think CGFI is any worse in this regard than any other stock listed on the OTCBB.
It's quite a leap to go from ...
Bruno, you have no idea whether or not they have sufficient funds since no financial info has been released since last November. You also have no idea how much work has or hasn't been done since then or how much it would cost to complete the requirements (again since we haven't received an update since November). I trust their projection that they'll be in production by the end of the year (based on the facts they know) more than your speculation that they won't (based on the facts you don't know) JMO