tax-loss credits again
Another kick at the can.
RCG seems to be two stories. A junior gold miner and a shell of tax loss credits ("credits").
It has two investors. Long term investors in the junior miner space. Traders looking to cash out the credits.
The former might see the credits as a freebie, $0 value, a way off-set risk, that might come into play when Dufferin is operational or when a property is sold for a profit.
The later might be looking for a way cash out the tax loss credits. Sellers of tax-loss credits could have taken the most out of the company in the fall of 2016 when it was trading around 27c. They would have maximized their credits. In that sense the credits, at the time, were worth $15M to the seller.
The value of the credits has been decreasing with dilution
From 15/45 = 33.3c in 2016 to 20/175 = 11.4c in 2018
(the caveat always being able to cash out)
It is open question what the credits are worth on the open market now.
A company with existing operations and taxes payable should see them as the easiest dollars to mine.
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June 2016
0.8M assets
- 3.4M liabilities
= -2.6M shareholder equity
(-2.6M + 0M credits)/45M = -5.7c/sh long-term
(-2.6M + 15M credits)/45M = 27.5c/sh cash-out
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June 2017
25.1M assets
- 16.6M
=8.5M shareholder equity
(8.5M + 0M credits)/123M shares = 6.9c/sh long term
(8.5M + 15M credits)/123M shares = 19.1c/sh cash-out
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Sept 2018
32.9M assets
- 20.0M liabilities
= 12.9M shareholder equity
(12.9M + 0M credits)/175M shares = 7.4c/sh
(12.9M + 20M credits)/175M shares = 18.8c/sh
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Dec 2018
31.3M assets
- 18.3M liabilities
= 13M shareholder equity
(13.0M + 0M credits)/175M shares = 7.4c/sh
(13.0M + 20M credits)/175M shares = 18.9c/sh
credits valued at 50c on the dollar (just a guess)
(13.0M + 10M credits)/175M shares = 13.1c/sh
At some point the hagggling will be about the combined value of Dufferin and the credits. And not the bits and pieces.
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