High River Gold Mines Ltd HRIVF

RE: RE: Same Old

[Power1]

IMO, Severstal did not bid the company because there were other offers on the table and they would not have had success with a vote.   Too many connections between Sprott (SAM), placement of Sprott resource Corp BOD to HRG and dealings in progress at the time on Severstals purchase of the coal play from Sprott Resource COrp.  Coincidence?????

Some thoughts....   HRG was on the verge of vultures picking it a part...they needed the cash or the company woul have gone to creditor protection (IMO).  Severstal was already in so came forward at the last minute with just enough to carry it through the qrter and in doing so picked up 51%.  

Let's look back for a moment.  You can confirm through stockwatch.  A trader through morgan began shorting hrg end of July/August.  Oportunistic I would say.  Price pushed down to .50 and then they covered and began mass accumulation (morgan again).  At they very end of the accumulation, they pushed out 500,000 shares and a couple of strong selling positions entered the picture.   That brought us down to the .20's.

Due to unexpected  the collapse in the entire global economic picture, I think severstal had to go with a plan B.  I have no idea what plan B is, but I don't think they have today what they initially expected.  So let us speculate,

1.    51% gives them voting control. Sprott no longer a major factor in the vote due to dilution.
2.    BOD is now there's (where are the independents?)
3.    HRG in need of cash again.  So......who does that decision rest with?  Severstal or shareholders? Did seerstal forsee further production problems and weak cashflow when this started?????
4.   Investing in the company vs immediate take out mitigated some potential legal risks that may have carried on to the new owner. 

Where do we go from here? 

If MGT renegotiates financing and is able to secure enough capital to keep this floating, then I will believe their interests will be to maintain listing and increase shareholder value.

If they proceed to peice off assets and undertake a non-brokered private placement (severstal capital) than I think near term take out is inevitable

I guess we will find out this week!