Since this was soooooooooooo far back in the posting that a few folks may have missed the post I thought it only right that I repost it from when Johnny4profits posted it just a few days ago. Here it is again.
11/19/2014 CPRKQ Shareholder Update
It's not that I'm so smart, it's just that I stay with problems longer. ~ Albert Einstein
Energy and persistence conquer all things. ~ Benjamin Franklin
The most essential factor is persistence--the determination never to allow your energy or enthusiasm to be dampened by the discouragement that must inevitably come. ~ James Whitcomb Riley
If you can't fly, then run, if you can't run then walk, if you can't walk then crawl, but whatever you do, you have to keep moving forward. ~ Martin Luther King, Jr.
I decided to start this “update” with a few quotes about persistence. While we are all anxious to get the New Copper King trading, the extended time it has taken is wearing on all of us. I understand the frustration, the hard work, the time and the money that has gone into getting Copper King to where we are.
Taking a company from bankruptcy while preserving as much value in the equity as possible is not an easy task. I have said it many times before but I think it is important to say it one more time. Equity holders (you and me) very, very seldom survive the bankruptcy of a company with anything. From the very beginning of the bankruptcy saga of Copper King and Western Utah Copper we have all understood that what we are trying to pull off (saving Equity) is a long shot. Many times during the past three or four years we have faced the possibility of a complete wipe-out of Equity, but we have persistently fought through things each time.
Since the confirmation of our Plan we have been working hard to rebuild the Company so new shares, when they are issued, will have value that can be maintained. When we are in the proper positions we can then use Equity to continue to grow the Company. The task of rebuilding the Company has been almost as hard as fighting off the vultures that would have picked us apart. And, it has been at least as time consuming, expensive, frustrating and laborious. It has also required lots of innovation and lots of PERSISTENCE.
The fate of Shareholders in a company Chapter 11 is largely predetermined not only by precedence, but also by the way bankruptcy law is structured. Much of the same mind set also consistently raises its head in the rebuilding “after bankruptcy” process. This is especially true for a company like Copper King which has had no ongoing operations or cash flow. We are making progress and we continue to move forward with PERSISTENCE.
Persistence is essential to our success, the more of it we apply, the more we are able to accomplish.
Because, as I mentioned in the statement we put out last week, there is not a lot to “update”. I want to spend some time in part two of this letter going into some detail on the thinking and strategies behind the decisions that have been made to continue to move Copper King forward.
Before we get into Part Two, I think it is important to directly address some pressing issues, myths and misconceptions.
First: Why the New Copper King is not trading yet.
While we have been working diligently to position CK as a viable on-going company, trading is NOT totally up to management. Just like we had to fight through the bankruptcy, the regulations, the regulators and the laws surrounding all of that - there are a whole new set of regulations, regulators and laws to deal with as we move through the process of issuing stock and getting trading. We will get trading as soon as we can, but we cannot force the regulators to approve anything. The Judge can, and he did. He decreed that we were to issue shares on a pro-rata basis and that we were eligible to trade. He did not say the Regulators had to allow Copper King to trade. Due to the unique and largely unprecedented nature of Copper King, the Regulators are being cautious if not resistant. We can issue the stock, but we need to be able to show the Regulators (one of which has the words “Regulatory Authority” in its name) that Copper King can be a viable business.
Second: What have we done to show Copper King as a 'viable business?'
We have been working to get some operations going. These operations need to be able to produce a pro-forma that supports the potential of positive cash flow. Copper King is not a pure exploration company like some of the Canadian Juniors who seem to be more interested in mining shareholders than actually being in the mining business. Because of these questionable practices, funding for mining companies has been hard to come by for the past three or four years. The mining media has produced article after article about this issue. It looks like some 60% of Junior mining companies are in danger of going out of business within the next year if things do not change. We are working hard to differentiate Copper King from these ‘exploration’ companies.
The largest asset Copper King has is the Net Operating Losses (NOL) we were able to preserve during the bankruptcy. We have discussed the rules and regulations surrounding maintaining the NOL’s in past updates. These regulations are mostly scripted by the IRS and we have had to make sure we not only set things up correctly in the beginning, but that we also stay within these guidelines. This has required us to work to obtain the rights to shares that are to be issued to large unsecured creditors because rash actions on their part could significantly diminish the value of the NOL’s. Not just anyone can buy share rights without “upsetting the apple cart”, so we need to make sure each owner of rights is a “qualified” buyer and everyone supports the value of the NOL’s.
Third: Point Two begs the question of how we have kept Copper King's bills paid?
The bankruptcy was very expensive and during a bankruptcy the estate of the debtor (Copper King) is responsible to make sure Creditors, Professionals and all other expenses are paid. What if the debtor’s estate has no operations and no cash flow? Where does the money come from? Simple answer; borrowed money. So everything CK has paid both during and after the bankruptcy (CK does have significant ongoing expenses) has been financed with borrowed money.
Where has that money been borrowed from? Primarily two sources 1) the Copper King Debtor In Possession lender Equity Security Funders and 2) loans/investments made by or personally guaranteed by current management.
We are currently working to get a mine in full operation. We expect that within 5 or 6 months the mine will show positive operating cash flow. But, how is mine development being financed right now? In exactly the same way as other expenses; invested or borrowed money. Money invested by and/or borrowed by the same entities and people. The post-bankruptcy investments and loans have been structured so as not to impact the Copper King balance sheet in a negative way.
Forth: Why do we talk about Share Rights and not Shares?
Since the Judge cancelled all of the CPRK shares when he issued the order of acceptance of the Plan, there have not been any New Shares in Copper King, only Share Rights. All of us are rights holders under the proposed pro-rata distribution, we are not shareholders. Notice that this applies to everybody from professionals and creditors that accepted rights in lieu of claims, to current management, to broker/dealers, to the DTC and to former shareholders (including current management). Our legal advisers have told us to be very careful about how we address rights holders in any formal communication as the word “shareholder” implies something far different than the words “rights holder.”
Fifth: Why Hasn't Management given us a firm date for issuing the new shares and getting trading?
The answer to this question goes back to some over optimism and hopeful thinking on my part. Even though we have always tried to make sure we included plenty of disclaimers in every formal communication, sometimes a projection or a comment I or another member of management may have made has been construed as a promise. For example, back in early Spring I was confident we had a project done on a large mine in Idaho. We had funding put together and we had a formal signed offer sitting on the table we were confident would be approved by the board of directors of that company. In fact, the President of that company assured us our offer would be approved in a “couple of days” at the next board meeting. He actually got fired at that board meeting and our offer was voted down. In the meantime I made some comments based on his assurances that I hoped to be trading with 30 to 60 days.
We are still working without pay and we are still putting our own money in to keep Copper King moving. (Funny how some people have a hard time understanding the economics of that statement.) There are a LOT of positive things happening with Copper King, many of which we are reluctant to talk about because they are not ‘DONE’ and we don’t want to create false expectations. Be assured that our first priority is to make sure all rights holders get maximum returns, not to meet a specific date.
Sixth: What is being done to advance the trading issue with regulatory authorities?
We have been working with them for over a year now. One attorney told us that while they may not be able to stop us from trading, they can do a lot of things such as send us form after form to delay us for up to two more years. That statement was shocking to me because I think we have done everything possible to set Copper King up as an exemplary company. A company that does everything as correctly as possible with a management team that puts shareholders first. (Protecting shareholders is what regulatory authorities are supposed to be all about - right?) The “bad deeds” of prior management may still have some effect on our relationship with regulators, but I am sure that we have most of that cleaned up. I think they see that we are doing things as they should be done. And, I think they are beginning to recognize that the equity of the Company was cleaned up in the bankruptcy.
In order to put our best foot forward we have hired a new securities attorney (where did that money come from - ever know an attorney to do corporate work for free?) with a very good reputation. He is working with our potential market makers and with the regulators to move Copper King trading forward as quickly as possible.
There are some other things we could address here but I think most of it will be covered in Part 2.
I will end Part 1 with another persistence statement apropos to this letter.
Money grows on the tree of persistence. ~ Japanese Proverb
I am more excited than ever about the future of Copper King. I see many, many very good things happening right around the corner. I am excited to be part of it.
Let’s make it happen together!!!
Thanks for your support and please look for Part 2 sometimes in the near future.
Lee Abbott
Cautionary Note
Cautionary Note Regarding Forward-Looking Statements: This Shareholder update contains certain "Forward Looking Information" and "Forward Looking Statements" within the meaning of applicable securities legislation, which may include, but is not limited to, statements with respect to the ability to realize the expected benefits of retaining an interest in ESF and/or Copper King Mining... Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" "does not expect", "is expected", "is likely", "budget" "scheduled", "estimates", "forecasts", "intends", "anticipates", "does not anticipate", or "believes", or variations of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur", "be achieved" or "have the potential to". All statements, other than statements of historical fact, herein are considered to be forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements express or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements include: risks associated with not closing certain transactions, including failure to obtain all required regulatory approvals, the expected returns from investments and the other factors. There are risk factors associated with investments in these companies and you should make sure you are aware of them. Forward-looking statements contained herein are made as of the date of this Update, and the Company disclaims, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements
Contact Us
CopperKing Mining
380 North 200 West Suite 200
Bountiful, Utah | 84010
Tel. (801) 301-8733
Fax. (206) 339-3295
CopperKingMining.com
