General update, workers, WEX etc.
Spoke w/Rob Martin again. I asked about the workers again and what sort of progress they're making. Per my previous conversations a few weeks back they needed 9-12 new miners to get to full production. He just got back from vacation today, but according to what he's heard they now have 7 new ones since I last talked to him. He didn't confirm it himself yet though. I asked if he'd put out a PR and he didn't think it was material, but he'd maybe try to put it on the website. I explained some of the shareholder concerns regarding this issue so maybe he'll put more effort into updating the website.
I also did some digging on the dispute from Jan 4th. Read eventhing on the Raging Bull board as well as spoke with somebody from Wex (Fer. Fer.) for 30+ min and then spoke again with Rob afterwards. After speaking w/both sides I tend to agree that WEX is seriously impaired or Rob is lying thru his teeth in a big way - not a simple misunderstanding. Facts seem to support GPXM/Rob. I also feel very confortable even if this issue gets delayed (most likely since WEX doesn't want to go to binding arbitration - GPXM does). Both share prices are hurt due to delay, but since WEX doesn't have any legs to stand on their only tactic is to delay. Thankfully the LLC agreement has timetables for this, but I think this issue will take months to resolve, not weeks.
Worst case was put forth by somebody on the Raging Bull board. WEX could somehow shutdown production in an effort to force GPXM into BK until the matter is resolved. Lots of problems w/that scenario
1) BK would be very messy. No guarantee WEX would increase stake in Ashdown.
2) Moly prices may not remain high. In WEX's best interest to get into full production ASAP and keep it there (even if they lose 9.5%)
3) LLC agreement spells out binding arbitration. They can sue all they want, but the courts will just throw it back.
4) It would most likely require a 20-30 mil bond being posted by WEX to account for potential damages being done by shutting down production assuming they could even find a legit reason.
5) Lastly, GPXM is 60% owner and operator. Nothing has happened thus far and I don't expect it to.
WEX will fight this tooth and nail. It could get much uglier as WEX's credibility is very much on the line here - not to mention 9.5%. However, ultimately I don't think WEX can do much. It's just a question of time and what sort of monetary award GPXM will get. It's possible that the Arbitrator will rule that 9.5% is unjust for a payment that's only late by 2 days, but since this clause was added per WEX's request it doesn't seem likely. Hard to say. Either way I don't like uncertainty as much as the next person, but I don't think this is going to be a big issue going forward. Short of the worst case scenario I don't see much downside for GPXM w/respect to late payment so I think they played it right in asking for the 9.5% even if it hurts both share prices for a time.
When I asked Fer. Fer. of WEX - pretending that I was interested in investing, but wanted to know their overhead was he couldn't tell me. So are started throwing around some numbers and he said it would be closer to a half mil. If I were a WEX investor it's hard to have much confidence when they can't even tell you what their salaries will be once the Ashdown LLC starts throwing off cash. Given their past behavior/irrationality who knows what they'll consider reasonable compensation. Not a WEX investor myself, but just found his response strange.
