Well reasoned post.
So, since I like your logic, the pregnant question is this:
what kind of other entities that would afford some kind of beneficial impact could they be contemplating? A smelter, perhaps?
Lets see:
SFMI owns the Sinker Tunnel, which means that all the output that is conveyed thru it will generate income for SFMI. SFMI owns the mill site. GHDC owns the properties, various percentages of claims, and they have an income stream via the operating agreement. Oh... and SFMI owns the piles that are on the surface, with no roaylty due to GHDC.
So, the income stream for SFMI is via the existing mill (SFMI owns the 20 acres & the mill, if I recall). The Diamond Creek Mill is current income for SFMI, therefore. Royalty free piles on the surface is current income for SFMI too. And the will eventually realize an income stream via the Sinker Tunnel. Sinker Tunnel is a post-poned (or call it future) income stream, so that 2 current income streams and a future one for SFMI.
OK, lets look at GHDC. The monthly payments to operate are current income stream for GHDC. The royalty income from output from the shafts is obviously well in the future. Thats one present and one future.
And, when the shafts start being used and their output exits thru the Sinker Tunnel, the plan to utilize the Sinker tunnel for year round milling will probably mean there is going to be more income coming to SFMI than going to GHDC.
I mean, the milling is stated to be at two sites in the future: the mill site that we all saw get built & a mill at the Sinker Tunnel itself. SFMI owns both. Piles are royalty free for SFMI, but they pay a monthly rent to GHDC. Present income stream will. IMHO, tip more to SFMI. And, at best, the use of the shafts will be balanced vs the use of the tunnel. At best, a wash, but I'm guessing its more weighted in both the present way things are set up, and in the future.
So, as I see it, SFMI has gotten itself more income streams (both present & future), and GHDC needs to establish something of their own. Thats my thinking about the intention to double the shares, what with it being stated from the gitgo that they will be using the additional shares to buy something.
I know this is a very rough thumbnail sketch because there is a complexity to the cross-pollenization of these two companies that can't be accurately describes in the above overviews.
But that said, the idea I'm toying with is this: SFMI is currently positioned to be more cash positive, IMHO, for the immediate future, than GHDC. So GHDC will be nosing around (if they ahve not done so already, I'd be surprised), for something to add to their side of things that serves a an additional income stream.
I know tis is wild-ass speculation, but if it were me, one "unstated" goal I'd sure as heck have if I were setting up these two cross-pollenated entities is to use them for income tax balance-out. So, that said, GHDC needs something else to counter-balance what SFMI has set up thusfar.
Maybe longhorn bill, or somebody else who has sat in the hot seat with OTC companies in a financial capacity, could weigh in on the IRS tax advantages of having crossing income streams where all of the various outgoing expense elements is pocketed by interconnected entities. Just a thought.
So, I'm of the opinion that this is the general situation. Thus, IMHO, it follows that GHDC should logically be in search of complimentary businesses.
And from a tax stand point, it is also in SFMI's interest too.
As I said at the outset, I like the thought you (JohnCM) expressed in that neither company is capable of taking on any new MINES at this time (unless they stumble on some kind of amazing special situation, which sometimes happens).
But apart from the out-of-the-blue surprise mine deal, I think the rational expectation will be that GHDC is intending to use shares to obtain controling interest in somthing like a smelter.
Just my opinion, and its a wild ass guess, but it sure looks to me like GHDC needs to be getting income from more than just the rent payment, and as it stands now, I would doubt that royalties from the shaft usages would balance out with the costs of using the Sinker Tunnel and/or the mill that will get built there.
Basically, if they don't gin up other income stream ideas and get them firmly in place, they will quickly be getting the shaft even though they own all the shafts LOL.
So, thats why they are buying some kind of property, IMHO.
As to it being a mine.... like you, I don't see that as reasonable. A smelter or a mine service company.... something along those lines makes sense.
JMO
Imperial Whazoo
AI
