Great Basin Gold Ltd. (fka GBGLF)

[amarksp]

Russ:

Really have no reasoned opinion on first 2 paragraphs of your post other than what previously stated. We have no idea of what terms are in Voting Trust Agreement. Do not believe SouthGold will retain all their possible shares, will likely have to cash in some options to pay the exercise price on the ones they keep plus the tax liability...

As for your second question:
"What's your theory on why HD stocks trade so poorly?"

Well, the 4th quarter $4.5M loss was not helpful as analyzed here:
http://www.bearforum.com/cgi-bin/bbs.pl?read=289676

Second, GBG has issued stock via PP's like candy... My opinion is LOM has not found suitable shareholders for many of these shares although RBC/Embry has taken 10% on each of the recent offerings and I believe the 5.6 million share June 2002 placement likely had better/long term institutional participation than past offerings. A few gold mutual funds also participated in this June offering. Still, I would not be surprised if many of these PP shares ended up with hedge funds or other investors that would short the GBG common and retain the warrant for upside protection... An educated guess on my part...

Here is a related possible guess. The 5.6 million 6/3/2002 warrants just expired on 6/3/03. Maybe, just maybe, those hedge funds are still short, without their upside protection with the warrants anymore, and they have pressured the stock down hoping to cover at lower prices... Probably wishful thinking, but possible...

Third, I share many of your concerns expressed over on the SI board, and this has likely prompted many shareholders to sell causing the share price weakness. For example, your post:
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=19026507

In addition, the lack of transparency in their accounting is troubling to me, i.e. the use of that Prepaid Expense HD account listed in their current assets. Also, believe Sinclair's comments/warning on multiple gold companies being managed by same management team have an element of truth to them, this is not the best way to run a gold company, IMO, I would like to see HD salaries/bonus listed each quarter on their income statement and not booked to prepaid expenses on the balance sheet.

However, I beg to differ a bit on whether GBG has delivered or not... Agree GBG has failed to deliver on share price, BUT delivering 5 million proved ounces plus 11.5M inferred ounces at a cost of $4 per GBG share is great management performance, IMO. Just look at how NEM's directors and management are awarded options/bonuses:
"Murdy said net asset value per share was the key value driver for Newmont and most other major mining companies. NAV and reserve replacement constitute 70% of the company’s internal performance hurdles, the rest made up of free cash flow after capital expenditure and earnings per share."
Holding GBG to the same methodology as NEM would certainly justify HD's $1.1M of salaries this past year plus the options., if anything HD management was underpaid last year... Nonetheless, I am very much disappointed in the share price and by the dilutive share issuances by GBG (but not with the SouthGold deal shares issued, which was by far the largest share issuance/commitment during the past year).

If GBG shareholders relied upon "NAV and reserve replacement" metrics to make their selling decisions over the past 12 months, GBG would certainly not be selling at under US$1.00 today. I have this love/hate relationship with GBG management, love the 2002-03 management performance causing the increase to their NAV and hate the 2002-03 management performance responsible for the current share price...

If you really want to know what I think would solve the share price problem, look no further than NEM's Murdy comments:

"Citing the most common conflict of interest problems, Murdy also hinted that Newmont might be more demanding of its investment bankers in future. “We have to look at compensation for investment banking services. Perhaps its time to pay for services with restricted stock?” he suggested.

Speaking later on the fringes of the conference, he said the company had no immediate plans to implement such a plan, primarily because its Newmont Capital division has been able to execute 40 transactions in the past year without any investment bank assistance. Nevertheless, he said performance based compensation might be considered in future, rather than paying large upfront fees as is the norm today."

The full Murdy comments are here:
http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B288256D42006E7D57?OpenDocument

Sure wish junior gold stocks had more bargaining power, because paying for PP investment banking services solely with restricted stock would work wonders, IMO...

Finally, I continue to believe GBG will be listed on the AMEX shortly. Per my prior posts and understanding, surprised that this AMEX listing has not already happened... Possibly we have Nasdaq market maker shennanigans going on coupled with a large seller that has been rumored... Believe the AMEX listing will help the share price, AMEX market makers should be better, AMEX listing is more credible, and at least the bid/ask spread won't be so large...

Just some thoughts.