Will we have a JV Partner simpliciti???This next statement may amaze you simpliciti, but I do tend to agree with you that having a strong Asian Partner, which Garry Stein says he is looking for right now, would be a benefit to this company. But I do also disagree with you and in what you said about the company not having the "where with all to see this to the appropriate conclusion."
I think what you first need to do simpliciti is reevaluate your understanding of what a Partnership, or Joint Venture is, and what this company might hope for and expect to achieve with this type of arrangement. Since you met these managers personally, you should know that all of them have experience in bringing new mines to life, either technically or financially.
So with such a strong team, why would you want to sell half of your mine, and sit on your hands and let somebody else build it? As Garry Stein is quoted in saying: "Peter Secker (former head of Michelago) has not just built this plant (MIC BioGold)— he's built mines. So why give this to someone else then, when we have almost the best now?
Just look at Ivanhoe Mines (IVN) in Mongolia, and just for the record and although they are close to our Beyinhar Mine, Mongolia is a separate country, and not part of China, and like Beyinhar is in Inner Mongolia. But anyway, Ivanhoe has a huge gold and copper discovery there, but unlike like GCX, their mine will cost in excess of a Billion Dollars to build. In comparison we only need $22M, and in which we could easily finance and raise by ourselves.
Ivanhoe, being faced with these huge costs, but also a very huge and potentially profitable mine, took on a partner who understand the mining industry and also has a lot of cash. They decided to JV this project with "Rio Tinto" who is perhaps the second largest miner in the world, behind BHP. BTW Rio Tinto is from United Kingdom and not Brazil, as some think.
But understanding all this, Ivanhoe will still have the controlling interest in this mine and will jointly help develop it. They will not just sit back on their hands. They formed a Technical Committee with Rio Tinto and will jointly engineer, construct and operate Ivanhoe's Oyu Tolgoi copper-gold mining complex.
To be honest, I believe this is the type of partnership our company is looking for to, but on a smaller scale, and preferably Chinese. I don't think companies like Rio Tinto would be too interested in a small company with only 2 Million Ounces, but who knows now how high this can eventually end up. But that doesn't prevent them from finding a partner with a good cash supply who would finance this mine for a piece of the pie.
Keep in mind that Golden China's Mother is a Canadian Based Merchant Banking Organization who's main activity is in China and Hong Kong. One of our current board directors, by the name of Douglas Betts, and who was also our past CEO, is also CEO of that company. So they are still well connected. Also, Garry Stein, who was also a Vice President in that company, and who now is our Vice President and Chief Investment Officer for Golden China Resources, is also a Merchant Banker, among many other things.
So what all this means then is that we are very well connected in Hong Kong and China. This is why the company seeks an Asian Partner, among other things. I have no doubts that they are in the middle of discussions with several prospective partners who may very well want to diversify into the gold mining sector in China. I also have no doubt that they will find a strong Asian Partner very soon, and on our terms.
So why a strong an Asian Partner, and as Garry Stein said awhile ago, that they were looking for? It is because Golden China Resources plans to do all their mining and other activity in China. This of course does not include the other outside the core investments, to diversify, like owning 24% of SGA, with their mine located on the Solomon Islands.
I think we all know that in China it is not so important who you are, but more importantly is who you know. Having a strong Chinese Partner can smooth out many rough roads ahead, including permitting, as well as making other future acquisitions much easier.
Since I protest against people posting things, that they cannot back up any statement with at least some proof, or reason why they feel this way, I must do so also, because I am not an exception. The main reason why I feel we will have a strong partner very soon comes from many reasons but the latest one is from my first post and link under this topic "Letter to the Shareholders". Here is the LINK again:
https://www.mining-journal.cn/download/07-06-EN/MOM_Success_is_golden_in_China.pdf
Now what you may not have noticed in this article is where Garry Stein says: "I've been spending a lot of time in China". So my next obvious question is, "Why the Hell is our Vice President and Chief Investment Officer spending so much time in China?". We don't need him there, for his technical skills, as he doesn't have any. But perhaps we need his Merchant Banking skills there, to find us a winning partner. Does this not make good common sense now?
Well, the great thing about Garry Stein is reading him is like reading an open book. I also think he is honest as the day is long and that he would be the worlds worst person to tell a secret to. All great qualities in an important Vice President.
Garry already told us awhile back why he is spending so much time in China now. You longer shareholders may recall a post of mine, awhile back, in which Garry said the company is looking at "Listing on the Shanghai or Hong Kong Stock Exchange, or for a "Strong Asian Partner".
So now in this link Garry confirms this and says: "I've been spending a lot of time in China looking at a Golden China listing in Hong Kong. We've concluded that the numbers we quoted are right, and that Hong Kong is giving far more aggressive valuations than western markets for gold projects."
Now you may think that since Garry Stein also mentioned this a long time ago, and since nothing has happened so far, maybe this idea got shelved, but this way of thinking is wrong.
Remember now, we are dealing with Merchant Bankers here, and besides a snail, they are probably the slowest moving animals in this world. Each step is taken cautiously and carefully. You mentioned yourself simpliciti that the company took over a year to merge with Michelago, so it would not be surprising then that it will take them this long to find a life long Asian Partner.
Secondly, it takes time to list on any premier stock market. How long does it take from start to finish to list on the TSX? I don't know, but I bet it is over 6 months. So how long do you think it will take to list in China, and dealing with the Chinese People, and the Chinese Bureaucracy? I don't know this either, but do you want to bet against me in that it is longer than it takes in Canada?
In fact Garry Stein also says this in that link: "The biggest problem is that the pace of things locally is sometimes incompatible with North American Markets, where the capital market makes decisions about you every second, and there is an expectation that projects will move at a certain pace; that pace falls off when you have to stop and wait for a signature." So what Garry Stein is saying is that it takes more time in China because of the red tape.
Although Garry Stein has already mentioned before about finding a strong Asian Partner, he does not mention this here, and instead only talks about a possible listing on the Chinese Stock Market. Why?
The answer is quite simply really, if you look at the big picture. But first you need to understand that Garry said strong ASIAN (as in Chinese) Partner, and not just a strong partner, like Rio Tinto. This is for reasons already mentioned here, but also very important to this company.
So where are you going to find a strong Chinese Partner or Chinese Investor? Would China be a good educated guess? But in order for them to do this they need to list on the Chinese Stock Exchange and this is why they are concentrating so hard on this step first.
When Ivanhoe formed a JV with Rio Tinto they sold $1.5B worth of shares to them, at a good price. In return for this good price, and from this money, Ivanhoe must spend at least 90% of this money in building this mine. This partnership was very good for Ivanhoe, very good for Rio Tinto, and very good for the investors. This also explains why their stock price jumped more than double, after this partnership news was released, and is holding there.
So if Golden China Resources wants a Chinese Investor, they will most likely have to list on the Chinese Stock Exchange in Hong Kong, or Shanghai first. How else can they sell shares to them? Do any of you guys buy and sell shares in Hong Kong? Maybe a few, but not many for sure. So if we don't generally do that, why should they? There may even be some restricted for them to do so, by some Chinese Law there, and for all that I know about it.
There is no rush to sell shares, as Golden China Resources doesn't need any money or to sell any now, or at least not until the end of this year, or early next year, or until construction is near. I do believe however they would like this deal sowed up as soon as possible, and thus I expect to hear news about this soon. So now, and after looking at this whole big picture carefully, this is what I expect will happen with this company in the near future.
We will need about $30M by the end of this year, to spend $22M in building this mine, plus have working capital to last long enough until we start producing. Maybe even $35M, to continue our exploration on a larger scale.
So what I expect, when it does come time to raise capital to build this mine, they will not use a Canadian Merchant Banker or Broker, like Haywood Securities, or Paradigm Capital, or Fraser Mackenzie.
What I think they will do instead, as this to me seems the most logical, is that they will use their Mother Company, Kingsway International, who are also Merchant Bankers, but specialize in China, and will float these new shares either privately, or on the Chinese Stock Exchange, at which they will get a much better price then what they will get here.
I admit that a lot of statements here are still quite hypothetical, but I think we do have enough evidence now which points in this direction. You just need to go over what Garry Stein has been saying.
Why else would Garry Stein, who was a Vice President of Kingsway International, be spending so much time in Hong Kong, besides the glorious weather there? Why is this topic of listing in China and finding a strong Asian Partner always brought up by him? Why would they take the great lengths and money to actually research the price differences in the Canadian, Australian, and Chinese Stock Exchanges, if they had no interest in floating shares in China?
I admit that this present low share price is confusing for me at times, but the overall picture of this company is as clear to me as the new 48" Color Television I am going to buy with part of my profit money from this company.
If this low share price bothers you right now then may I suggest you do what I do, and no matter what price you paid for this stock, or what it sells at now, that you stuff your GCX Shares under your pillow until at least next January. If you can do that, you are going to come out of here as a big winner, as I can't see gold prices dropping below $600, and this company just has too many good things going for it to be ignored forever.
As I pointed out already, GCX does not need this money until the end of this year, but this does not mean we won't hear news until then. When Garry Stein first talked about listing in China, and finding a strong Asian Partner, I believe it was around last January. He said then they were doing a study on a possible listing in China, and also talking to several Merchant Bankers. He also said this would take between 3 and 6 months to conclude.
Since then, the study has been concluded, showing clearly that companies like us are valued much higher in China. Since 6 months will pass by the end of June, I would normally expect to here their decision anytime now, but as Garry also recently said, from my link, things are taking longer than usual, so then I wouldn't expect a concrete answer until the end of August, at the latest.
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