RE: Charlwood??Hi Prouditalian,
I have not given up any fight. I still own all my 5.5M shares with no plans to sell. I still believe this is a $2-3 stock eventually. My point is that a small financing and a Severstal debt conversion may dilute us and get them to 70% ownership, but the negative is far overcome by the positive in that it moves the company towards debt free that much faster. To be clear, I did not say huge dilution is OK. I am hoping for reasonable dilution. The reason the stock is not going up much is that there are no buyers. The current institutional holders are in an optimistic, but wait and see mode and they have likely bought what they want for now. But there are no new institutions or individuals coming into the stock with big buy orders. This is because of the debt overhang and the fear of Severstal's next move. Once a reasonable transaction is announced, it gets us past these concerns and sends a very positive message to the market.
My logic that Severstal is finally going to start maximizing shareholder value comes from deduction. They would need to wait 6 months from final buyout offer (until next Feb.) in order to make another offer to minority. By that time, the company will be close to debt free and at a much higher share price. A final financing or debt conversion now at these lower price will give them 70% ownership and likely satisfy them to start maximizing the value of their shares. Although we don't like how they have communicated their efforts, operationally, they truly do seem to be doing everything they can to cut costs and increase production.
Production05, the new expanded boilerplate on today's press release is due to suggestions made by myself and Marketmaker to IR. They listened and did something about it. This is a good sign. Also, the other answers Igor is giving to other shareholder questions are all encouraging. It is starting to look like the turn around in attitude we are looking for.
Lastly, I have been told that Prognoz is in a very isloated area of Russia and although it has huge prospects, it will take a tremendous investment to get it up and running. Obviously, such a mine could be of huge value to HRG one day, but with our share price this low, it would be way too dilutive to finance such a project at this stage. Obviously, if an attempt were made to sell it to a related party, then we would have to get legal advice, but if it were sold to a true third party for a decent amount, it would speed up our gold production. Another option for HRG, of course, would be to spin it off into another pure play silver pubco and give us all pro rata shares.