a Calandra reporthttps://ceo.ca/2013/10/23/barkervill%e2%80%8be-new-orleans-by-me-paramount-moving-the-calandra-report/
October 22, 2013
Most everyone likes an under-fished story. Even regulators.
So, this is Day 9.
Barkerville Gold Mines return to trading brings a doubling of the stock price for those who bought the tarnished stock in Americas pink-sheet market (symbol BGMZF) whilst the Canada shares were halted.
Those who bought Barkerville when the stock went back on line in Canada 9 days ago are up more than 30 cents a share.
Alas, those who bought 14 months ago on the Peter George surge are down about 75 cents, at worst.
Dont worry, says Frank Callaghan from up there in Cariboo, near Wells, British Columbia. Gold dont tarnish.
Barkerville shares rise since Oct. 9 benefits the companys coffers, which Toronto investor Eric Sprott replenished with a $15 million loan.
We know the background: an open-pit resource that Mr. George estimated at north of 10 million ounces for BGMs Cow Mountain in British Columbia; the stock (BGM in Canada) surge in summer 2012; the stock halt immediately afterwards; more than a year of haggling with the B.C. Securities Commission and TSX Venture Exchange.
CEO Frank Callaghan, animated as ever in a call to me, is at the site right now along the Cariboo trend, four or five hours drive above Vancouver. I hope to see the projects strung along the trend later this month or early next. It is something like 60 kilometers of mineralized trend with a history as colorful as Mr. Callaghans wardrobe: 100 creeks with placer gold; seven producing or past producing gold mines. Gold pours are the payback here, although there is no truth to the talk that two-ounce replicas of Grouse Creek Chinook salmon are forthcoming.
I saw Mr. Callaghan several times during the stock halt. He was not hiding turning up for a birthday celebration for friend and fellow gold CEO Glenn Mullan in Vancouver; doing a pub crawl (and drinking lemonade instead of ale); exhibiting at resource shows in Toronto. Toking along with friends; er, I mean, taking photos with friends
How could Mr. Callaghan hide with those burgundy, phosphorescent orange and blazing vermillion ties, shirts and hankies? He is the classy oversized showman we all expect when we invest in a British Columbia gold mine.
Once, at a Cambridge House show in Vancouver, he was surrounded by shareholders asking when the stock would start trading again. His answer was, Soon as we hear from Holland.
One fellow walked away, muttering something like, What do the Dutch have fupp-the-duck to do with this? (Photo: Frank In Top Hat)
Frank, first initial J. as in Joint, was referring magnanimously to his nemesis, Robert Holland, a BCSC geologist and regulator in Vancouver who must have blanched when he read the original Peter George resource report and its hints at 50 million ounces up there, 70 million nay, 90 million ounces of gold.
Now that the smoke is settling, I mean the Caroboo dust, here is the TCR skinny.
The terms sheet of Mr. Sprotts loan is a template for financing success, in our TCR view, if 1. the price of gold stays above $1,200 the lowest amount the Sprottian lender can receive for 12,500 or so ounces of gold during a span of 30 months; and 2. the stock price rises to 90 cents or so, almost where it is now making for what we read as an accelerated warrant payment to Barkerville, bonus or otherwise. Its a little complicated, like some French filmmakers pot. Plot. See terms.
On the bonus factor, for instance, read: After reinstatement for trading of the Company, and in the event that the volume weighted average trading price of the Companys common shares on the TSX-V for a period of 10 consecutive trading days is at a 50% premium to the Exercise Price (the Exercise Trigger), the Company may require the Lender to exercise $5,000,000 worth of the Bonus Warrants (the Forced Exercise) within 10 calendar days of the date the Company provides written notice (the Exercise Notice) to the Lender.
The exercise price is this: a 20 percent premium to the volume weighted average trading price of the Companys common shares on the TSX-V for the five-trading-day period commencing five trading days after the Companys common shares are reinstated for trading (the Exercise Price).
Our TCR stab at this is that the exercise price is going to be somewhere in the range of 85 cents to 90 cents a share; I did not take advanced statistics like the kids did here at home, so that is a guess. Today Tuesday is day 4 of the 5-day trading period after the first five days of trading began Oct. 9.
Whew.
All of this is a work in progress. So another 50 percent premium to that gives us a premium rush of about $1.25? Help me here, please. Dont scream if our calculations seem fishy.
Whatever the exact trigger-fish prices become, it is in Barkervilles interest to see shares go well above $1, when one factors in the volume-weighted effect. A forced exercise of $5 million of bonus warrants then goes to Mr. Sprotts desk for check-writing signature.
I have yet to purchase the shares. Have never owned them, But I probably will. I never ever want to see Frank Callaghan, or anyone like him with even a tenth of his integrity, go up in a puff of smoke in this business. I know I will get flamed for this: but I like him, I respect his 30-plus years of work in the business, and I enjoy both his company and his company.