I am no expert, but there are some things that I can see getting bent out of shape. IMO
We have already heard the beginnings of rumors which shareholders should not take part in... ie Chinese involvement, spin outs etc.
Here are some things I have noticed that need to be accounted for in these rumor beginnings
The JV is technically a JV between NBRI and itself.
Seeing that RGI is a sub, the that tells me that the JV is not because someone wants in on the action.
The JV is also 50/50, which verifies the same thing, or it shows the CEO to be foolish, which he doesnt seem to be. IMO
Just as an example, if the JV was with some other company the deal would be a 51/49% at the minimum, just to keep NBRI in charge.
If they split the company and sell 50% to someone they will have legal issues at some point.
The spin out could happen, or could never happen. Just because they spin out into a second company doesnt mean we will get shares. NBRI will get shares and the shareholders of NBRI benefit from those shares.
The spin out does not make our value increase.
I will try to keep this simple.
If we give half of the company to a JV we technically lose half our value. Since the other company is owned by NBRI we gain that half back. Everything is even.
If they sold RGI to someone our shares would lose 50% of their value but we would receive shares in the buying company and that would even things out.
So IMO this move is nothing more than separating a liability.
If the mine collapsed, and someone sues, RGI would get sued. NBRI and all its assets would be safe.
This is the only reason to actually split it 50/50. The company wants to keep 100% control so there is not a question of controlling interest.
It also comes down to money juggling. RGI can "loan" NBRI money with interest and NBRI can write off that interest against losses from other operations.
This also separates losses and gains of ruby from other mining operations.
Investors can see how JUST ruby is doing by looking at RGI, and exclude the costs involved in the other mining operations.
This also allows the company to be able to access financing that would not normally be available.
We can make a fortune in gold from ruby but if it does not offset the losses from all our other operations they will never see real financing.
RGI will have massive profits, and no other operations to drag it down, which will make it appealing to other financing possibilities.
In the end there are a lot of reasons to do this, but we do not know that reason, and may never know it.
IMO this should not effect the PPS here in any way. It probably will, but any effect will be retraced, since there is no real value change to the company by this move.
The change does signal that things are happening behind the scenes, and that could increase the value here, but until we know what exactly is happening we really can hurt the company by hyping it up.
If we all start rumors of the chinese invasion, and how we are going to get spin out shares, etc. the PPS WILL climb here.
And when the let down comes the PPS will retrace, and it will retrace further down than it started.
So my advice to the board is to wait until we find out exactly why, and exactly what is happening before we start pumping the move.
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