Replies to post #67243 on Southridge Enterprises Inc (SRGE)

[CountDeMonay]

Stervc, do you really think they would distribute some of the cash ($680m) injection? That would surely quiet the naysayers of course (& put a humungous smile on many peoples' faces lol) bc im afraid there might be a temporary pullback if the jv is announced vs a buyout...although in the long run it would still be fabulous. I guess it would it be like a goodwill gesture of sorts so people stick around? What do you think would be the reasoning for that type do 1 time distribution? Thanks as always!

[tob999]

Tic toc till the news tmro bro! I don't mind either the buyout or the JV or both! ;0)

[Sooah]

This means that SRGE would still be planning on receiving a cash injection of $680,000,000 from the major NYSE producer interested in doing the Joint Venture (JV) with them.

Sterling, I strongly disagree with you on this.

No company in the world would agree to give cash in the full amount $680MM of the J.V. unless titles can be held in their name. Even this comes with its own set of risks. This was exactly the problem that BGL had in their JV agreement with MSJ. Even on a 60% JV agreement, it did not give them rights to the properties and the courts have ruled that the JV agreement did not entitle them in any way.

Another reason why a JV partner would not outlay $680MM in cash is that they could not justify the expenditure in their financials when it's reported. Under what category would this expenditure fall under? Land acquisition for $680MM?

Why pay $680MM in advance for a joint venture when you can outright purchase the entire Cinco for $500MM - $550MM? The risk is actually less on a full acquisition than it is for a J.V., isn't it?

Further, if $680MM represented only part of the total project value (let's say 60%), aren't we saying that the total project value is well above $1 billion? This value seems very steep to me.

Quarterly dividend--what would that be based on? Surely, it'd have to be revenues. But how long will it take the companies to achieve any significant revenues/profits to warrant quarterly dividend payment?

A J.V. agreement would most likely entail funding of the Cinco project in stages. This spells out more ambiguity than clarity for shareholders. For this reason, I want to see more information.

[samsamsamiam]

Here's why the “JV Deal” might be better...

There is no buyout from a NYSE listed company.

unbelievable - all of it!

[3kidsplus1]

Great point stervc!!!

Here's why the “JV Deal” might be better...

Within one of their previously released PRs, the company stated below...

http://ih.advfn.com/p.php?pid=nmona&article=55129091

Quote:
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…The Company and its board of directors are currently discussing the possibility of a quarterly cash dividend to its shareholders from a certain percentage of earnings made from such Joint Venture. Southridge is in negotiations with this major gold producer to inject an amount of roughly $680,000,000 into this Joint Partnership in order to help the Company aggressively mine Cinco Minas and it's up to $5 billion in Gold and Silver reserves. The size of this project is rather large and that's why the company is in serious discussions with a NYSE major producer because it feels this will allow Southridge to aggressively mine and explore the property at a much faster rate therefore leveraging the price of Gold at today's market value. …
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This means that SRGE would still be planning on receiving a cash injection of $680,000,000 from the major NYSE producer interested in doing the Joint Venture (JV) with them. Then based on how it is mentioned in the PR, SRGE shareholders would still be getting a cash dividend to include the cash dividend being a quarterly dividend.

Keep in mind that from the post below, it will only cost SRGE $110,000,000 to give us SRGE shareholders the .20 per share cash dividend that was mentioned:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=81790079

So, taking $110,000,000 from the $680,000,000 that would come from SRGE agreeing to do the JV deal still leaves SRGE with $570,000,000 in cash (derived from $680,000,000 - $110,000,000). This leads me to think that from this JV, we would probably get a ”one-time” cash dividend of .20 per share then we would get a quarterly cash dividend based on how much Net Income is generated from the maturing of what the remaining $570,000,000 would do for maturing SRGE into a major operations in itself. In my opinion, this quarterly dividend could still be gracious if not better than the .20 per share dividend. I will have no problem hanging around to see.

So, in my opinion, the JV deal could be better than just SRGE selling the Cinco Minas property for $550,000,000. Still, either deal with either NYSE company would be awesome for us SRGE shareholders.