I exited today ... Good luck to all, so longI finally did more DD last night. I only had a small (and recent) position in SDRG, but I bought on movement first, planning to confirm with DD after. Poor of me, I know. I exited completely this morning.
I knew this SDRG China (and rest of world) silver play was a long shot (the assets are still unproven at this point), but there was strong conviction on my part for the silver price shooting up.
But what's really convinced me to exit now was the show coming from the Boardroom.
Every bit of coverage for this stock is paid for. Even the Iceman. There is Silveriswealth, Silver Strategies (a useful site, I find), EmergingGrowthStocks.com, WallStreet.net, etc.. I couldn't find any even semi-authoritative voice talking objectively about this play from an evaluative perspective; well, not positively anyway. And I suppose that's fairly common for just-out-of-the-door's, so fair enough.
Now:
2-person BOD, and the one with the mining experience you never hear from, and gets no cash compensation. The CEO is the other board member and his resume has no post secondary education ("some securities courses"), no mining or exploration experience, a couple of failed entertainment businesses preceding SDRG, Toronto (only) Chinses connections, and several language fluencies (maybe useful, but then none are Cantonese/Chinese). A sealer for me was discovering where he found the $25,000 to chase the stock above $2.00 on Jan. 25. The 09/30/05Q F/S have $4K in cash for SDRG, and $140K loaned interest free by SDRG to a "related company". I can only surmise (IMHO) this might be The Travellers International, Inc., the CEO's investment holding company by my estimation. 15MM+ in shares leftover from the entertainment business days and he does not buy a single one again in two years as the price goes all the way from $0.02 to $1.90? Fair enough, wouldn't really need more shares, and would rather keep personal money to add to the company directly if needed. But then he finds $25K to run it over $2.00 to its high of $2.05. The 15,000 or so in shares were purchased through The Travellers International per filed Pink Sheet Form 4. The stock price abruptly turned around when no one followed, and he stopped buying. I sat back last night, and said to myself, "I'm out".
I was enjoying reading Jim of Maryland here for a while, and certainly no offense intended, but I have become a little skeptical with talk turning to descriptions of Washington big wig dinners and what was overheard at them, and several tidbits of useful information that sounded like insider stuff. Jim now lets us all know that the CEO is going to China? To do what? The only affiliated person I can find any reference whatsoever to in China is a lawyer that has been "retained". The return flight alone to China is $1,500+. Who's paying for it? SDRG can't. It doesn't have any money. The little bit of cash it did have has all been advanced to "a related company".
And I can't clearly see any money coming into SDRG. I was unable to get a good/comfortable handle on the $10MM Dutch firm agreement. Possible "House of cards" agreement struck me as a synopsis for it. Just my opinion in the end. Now that's the only prospect of cash on the horizon. Unless the $140,000 is repaid back to SDRG, but even that will not go very far. Iceman's getting paid in options. I'd rather it was fixed cash. Nortel paid even their Finance and Accounting staff with loads of that stuff (there should be a law against that; think I'll write Mr. Harper and suggest it). I am aware of how that arrangement turned out for arm's length Nortel shareholders.
I remain long on silver, long on silver stocks, and long on a good viable interest in China silver mining (msv, or their parent mmm, is basically it, IMHO).
Good luck to all longs here. I wish you all well. I won't be back to look at the board. Tomorrow's another day, with more opportunities in this dynamic precious metals market. Fortunately today, I did catch the prz elevator going up as I got off the descending SDRG one. There'll be others like prz along the way. All the best to SDRG and it's longs. Do your own DD. I just couldn't see me along for the rest of this ride.