Resource Capital Gold Corp GDPEF

Yahoo has something for RCG chart enthusiasts

[LeftBook]

 

 

Yahoo has something for RCG chart enthusiasts

https://finance.yahoo.com/quote/GDPEF/key-statistics?p=GDPEF

 

The over the counter prices are reasonably close to their daily market cousin.

 

Curious minds might want to plot the following on the 5 year chart.

 

book value

2015 14.8c

2016 -5.8c write off of indonesian properties

2017 6.9c

2018 7.5c 

 

market value of tax credits (market value = 1/2 tax credit)

2015 30.0c

2016 15.6c

2017 6.1c

2018 5.9c 

 

 

book value plus tax credits

2015 44.8c

2016 9.8c

2017 13.0c

2018 13.4c 

All dates are June 30 year end.

Also plot Sprott's $4M 20c/sh investment in Fall 2016

Comments
Tax credits are diluted as share count increases from 24.4M to 175M.
Book collapses with the write-offs in 2016 and is rebuilt with investments.

A broken clock is right twice a day.
Market price crosses book value in early 2016 at 10c and again in late 2017 at 7.5c
 

 

Note:

all prices in current share structure

eg 2015 prices use post 5:1 consolidation so 24.4M shares

 

 

2015 24.4M shares (post 5:1 consolidation vs 122M pre-consolidation)

2016 45.0M shares

2017 123M shares

2018 175M shares

 

 

[LeftBook]

A broken clock is right twice a day The market price crossed the "underlying value"  on july 2016 yearend at 9.8c and again in july 2017 yearend at 13c. underlying value = book value plus 1/2 tax credits 2016 9.8c 2017 13.0c 2018 13.4c 2019 12.0c est The market price was : below the underlying value prior to july 2016, above the underlying value between july 2016 and

[damianchosenone]

Leftbook, We can do the calculations and predictions we want, but the bottom line is that we won't get near what we predict or think the company is worth. The 4 current bidders don't care about us as old shareholders, they want the cheapest deal possible . The only way we get a great deal is if the 4 compete and keep outbidding each other. I a 10 to 1 is done then essentially they offered

[LeftBook]

I think the trading halt price is meaningless. It is an echo of tax-loss silly season. For some traders it may have made sense to sell RCG at a heavy loss to offet their capital gains.  It has no bearing on the valuation. The bidders are not going to be looking at moving averages to value a $20M company. They aren't one going to look at the level 2 bids from 1c to 9c on the day

[damianchosenone]

1 week left for bidders to refine final bids. Expectation is we walk out of this with a shell company and tax credits and no properties. Good chance the properties will be gone. We are not going to get more than 20 million offers . Just realized we will get below market as we are in bankruptcy protection. Apparently ni company that sprott is an insider off made a bid. That takes away a lot of good

[LeftBook]

we don't know the bidders. So, we don't know if sprott is part or is not part of those companies. eg. ML7 could be a bidder we don't if the new company will trade at a price that is above or below its value. book value = 10.8M/175M = 6.2c/sh shareholder value = (10.8M + 10M tax credits)/175M = 11.9c/sh In theory it should trade at a premium to book value = 11.9/6.2 = 1.92x It probably

[damianchosenone]

Leftbook, we will be lucky to get 3 cents a share. Friend spoke with managament today and sprott is not involved in any of the 4 bids . It would be a conflict. We are screwed!

[LeftBook]

Damian, you have written frequently that Sprott Lending and Eric Sprott are two different entities. There is no conflict in adding Eric Sprott participating in as shareholder. why 3c ? are you back to 3x the halted price ? I believe it will be more like a private placement than a market price. Private placements are used when the market is disconnected from value. For example not valuing the tax

[LeftBook]

Damian, I recall that you and your group wanted to do a $2M private placement.  Is that the correct amount ? What was the share price ? when time frame was it  ? And why didn't you buy in the public market when people were dumping shares ?

[damianchosenone]

There is no conflict in that, however there would be if he was an insider with any of the public companies that are left in the bidding. Management said he is not. Management also said that whoever is saying we will get 30 million for rcg is smoking stuff.

[LeftBook]

your comment is ambiguous. "we will get" could mean 1) shareholder equity of $30M or 17c/sh, yeah that nuts 2)  company sells $30M, that is just book value excluding tax credits

[damianchosenone]

It is implied that the expectation we can have is that we lose all the proeprties and remain as a shell with tax credits. In that case 30 million as a total package, inclusive of paying off the liabilities is too much to expect. We are not going to get book value. Not a chance!!!! The company is bankrupt and had awful management. Gibson quit the company in November for a reason. Sprott gave away

[LeftBook]

level 2, halt price, Sprott's donation, Gibson's departure don't tell us anything about the value of the company.

[LeftBook]

lmcbain's post  on 5/23/2019 paints a different picture after his discussions with the company. Leigh wrote ... "Do not expect a relative jump to 20 cents a share" I have been told that the current level of bidding should make the shareholders happy - keep in mind that when we entered the NOI process a great many people expected bankruptcy, so relative to that anything

[damianchosenone]

Leftbook, Relative to bankruptcy; a shell with tax credits is exactly that! A 3 cent buyout is exactly that! Both these outcomes suck compared to being involved in a good company or having your money back.. For people that bought shares at a penny or the ones donated at 1.5 cents from sprott would be happy with a 3 cent buyout! Would you be happy with either of these?

[damianchosenone]

Maybe he meant dont expect a jump to 20 from a 10 to 1 consolidation. In that case, that is weak!

[LeftBook]

or maybe Leigh meant something similar to book value 6.15c/sh 31.3 - 18.3 liabilities - 2.2 = 10.8M 10.8M/175M = 6.15c/sh Leigh mentions share based purchases and investments. In both cased shareholders retain their portion of the tax credits. == The full value of the tax credits in an empty shell is $20M. 20M/175M = 11.4c/sh 3c would be a substantial discount. A buyer could potentially bag

[damianchosenone]

Leigh told me that getting a shell with no debt and tax credits as a good thing. That means we need a property, a CEO, a huge dilution and then back at it again!

[LeftBook]

"huge dilution" sounds very dramatic. After an asset sale RCG could start as a debt free shell with $20M of tax credits. It could become : 1/3 debt free shell with $20M tax credits 1/3 $20M property 1/3 $20M cash to develop the property The company would have a $40M balance sheet and $20M off-balance-sheet assets. I don't think it is right for owners of the shell