RE: RE: What is BTR’s board's magic ingredient
Thanks Forg – you do seem to keep a close watch on stock transfers and this can be an indicator to future action. It was quite amusing to hear last year that someone stole Goldman Sach’s front running software model and GS took legal action, in effect, arguing that only they should be permitted to profit from this unethical software!
Shares Anonymous. I don’t know how this description is allocated, but assume that these are mainly non institutional buyers / sellers, whose names need not be divulged by the brokers?
Investment banks do seem to have many tools for diluting a stock, in order to increase the number of shares they receive when making a corporate financing. You may be right with regard to GMP. After you initially highlighted GMP, I became aware that they do not appear to be brokers, but investment bankers, who generally act for large investment clients.
It is clear that the Metanor needs funding for at least the Bachelor capex shortfall. Therefore, it appears to have been naïve for directors not to have run this additional cash requirement in parallel with the Sandstorm deal. Such simultaneous fund raising may even have resulted in increased demand in the market, since it would be apparent that Bachelor would have been a fully funded packaged deal.
Last year, when the Barry 43-101 reserves were released, Ron Perry was “amazed” at the market reaction. It is possible that, yet again, the directors were, at best, unrealistic in their belief that the SP benefit from their announcement of the part funding provided by the Sandstorm deal.
A piecemeal financing, is a sign of weakness and often sacrifices existing shareholders, for the benefit of an institutional investor, waiting in the wings. Such an investor could have insisted on holding back their financing, until after the announcement of the undefunded Bachelor financing by Sandstorm.
That may have been a [shareholder] sacrifice that the directors were prepared to take if it were to be tendered on a take it or leave it basis.
I said in 2010, that there was not a shortage of exploitable assets in Metanor and that the directors should then have considered Joint Venturing, or merging with another company. However, the directors high risk strategy of drip financing does not seem to paying off and it is likely that existing shareholders will ultimately pay a higher price than they should do, for the price for the future dilution, which seems inevitable. The directors do have the element of timing at their discretion, therefore, I suspect that they may try to delay until a buoyant gold price resumes [to the extent that resources permit].
For information: According to Metanor 2010 accounts (note 10), the company’s deferred spend at Barry is $37.8m, against which $20.9m in gold credits were received (but at what cost in transportation and mill running costs?). It is ironic that this placing of the cart before the horse will have consequences.