RE: WOW, Now That's A Kick In The Teeth!doingthejob/aatozz,
I'd suggest that as a supporter of ISM, you shouldn't waste your valuable time trying to assess the financial viability of LBE. You should follow up on that lunch meeting with Randy the ISM CEO and offer your financial advice on that UMJ investment he made. There is some talk on the URSA forum that ISM is going to replace management and help out with a financing to realize the full potential of URSA. Estimates are that URSA will require close to 4 times the financing that LBE may require. Figure out the debt service costs on that - but maybe the first thing would be to see how ISM would assist with a $200 million financing. Would ISM introduce URSA to the financial house that handled that ISM $6 flow through that didn't flow through. Or maybe ISM could meet with some of the funds that bought the flow through, and had to pay back part of the promised tax saving to the Canada Revenue Agency.
Horoc and Jien own four nickel mines, one molybdenum mine, one silver mine, two smelters, seven refineries, and two chemical plants with total assets over RMB 3.0 billion. The company professionally provides all kinds of nickel, copper, cobalt salts and nonferrous metal products for plating, chemical plating, battery materials and metallurgy.
Jilin Jien is one of the biggest producers of nickel sulfate in the world, with annual output of 25,000 tons. The company is quite capable of figuring out how a mid tier mining operation can repay $64 million debt and preferred shares. They also have reports on identified reserves that suggest they are economically viable. I don't think they need advice from some wannabee from the GTA.
ISM and Randy however, say in their annual information that ISM "does not have a history of mining operations and there is no assurance that it will produce revenue, operate profitably or provide a return on investment in the future".
They may consider your input to be a supplement to their lack of knowledge on mining companies and financing. Your talents would be put to a far more interesting challenge advising ISM how to assist with a $200 million dollar loan at a rate of 10% or less, to a company with a market cap of $13 million. Maybe you could have ISM guarantee the financing - after all they still have a market cap of $19 million, even if it is down from $300 million. With that record of what you call "capital preservation", you will likely suggest that they should get a 8% rate on that $200 million loan for URSA
doingthejob/aatozz your "knowledge" of financing is a far better match with the ISM management style. You could even explain how some of the money could be raised by granting options - you're the genius that said Randy spent $500,000 to pick up some options. With that kind of knowledge of corporate finance Randy may want you to drop in and have a chat with Dundee - I don't think they want to see him again.
By the way, I see you think the 10% interest rate is predatory. The meaning of predatory is:
a : of, relating to, or practicing plunder, pillage, or rapine
b : inclined or intended to injure or exploit others for personal gain or profit
As I mentioned before, accusing Jilin Jien of plundering and pillaging a Canadian Public company and its shareholders, ia a very serious charge. Perhaps you could give examples of similar financing provided under more favourable terms? Or, if you consider this to be privileged information, perhaps the interim CEO could contact you for an explanation?