**Stockhouse Article**I have to say that I enjoyed reading the success story of your management. Obviously the smart money has contains itself in promising areas. The writer seems a bit jealous. Seems like a lot of cheap shares flowing around. And what about that statement at the very end of the article. I have not read the PR that cites this but certainly sounds interesting;
CB Gold continues drilling. It has left some investors wondering aboutthe size of the mineralized area at its Las Vetas gold property, becausethe company has not released drill-hole locations, citing "competitionwith a neighbouring explorer."
I think that is Galways property. Certainly a good opportunity for that company as well. Read this, you may find it interesting..CB Gold men make millions after drill results
2011-11-02 12:06 ET - Street Wire
By Stockwatch Business Reporter
Two Vancouver-based stock promoters, Fabio Capponi and Giles Baynham, have turned their $100,000 investment inCB Gold Inc. into more than $30-million in a little over two years. It is their first promotion.
Last week, CB Gold revealed eye-popping drill results from its Las Vetasgold property in Colombia, sending the stock to $1.82 from 68 centsover five days on 23.38 million shares. One intersection in particular, a115-metre interval at 7.57 grams per tonne gold and 1.48 grams pertonne silver, caught the market's attention, bringing instant fame tothe company's two founders. Although over the past two days the companycontinued to be active, trading 6.24 million shares on Monday and 2.84million shares on Tuesday, the stock has slipped 28 cents to $1.54.
Apprentices
Before starting CB Gold, Mr. Capponi and Mr. Baynham worked at EndeavourFinancial Corp., an investment company in Vancouver advised by one ofthe city's best-known penny stock investors, Frank Giustra. He wasEndeavour's chairman until 2007. At Endeavour, Mr. Capponi and Mr.Baynham received a valuable education in structuring and promotingjunior stocks. Mr. Capponi, CB Gold's chief executive officer, worked inthe mergers and acquisitions department at Endeavour from February,2006, until June, 2008. Mr. Baynham, an engineer and CB Gold'spresident, was director of debt finance at Endeavour from May, 2003,until June, 2008.
Shortly after their time at Endeavour, in May, 2009, the twoincorporated CB Gold. The following month they spent a total of $100,000buying 35,005,200 shares, which works out to a little over a quarter ofa cent a share, or to be exact, 0.2857 of a cent. Cheap shares in hand,the two then went to work and secured exclusive rights to option goldproperties in Colombia. CB Gold paid $290,000 (U.S.) and 900 millionColombian pesos for the rights.
By May, 2010, the company agreed to pay a total of $13-million (U.S.)and issue 11.5 million shares for the gold properties. Management hadarranged multiple private placements to pay for them. The first came inJune, 2009, three days after Mr. Capponi and Mr. Baynham bought theirshares at a fraction of a cent. Brokerage Raymond James Ltd. sold aprivate placement to a group of buyers who acquired 11.1 million sharesat the seed-stock price of five cents. Raymond James received 560,000shares and $16,320 in fees for its services as middleman. When asked whythe services of a broker were necessary to sell five-cent stock, oftendefined as a financing "for family and friends," Susan Rubin, CB Gold'schief financial officer, said, "The company reviewed its options anddecided it was the best one." Ms. Rubin added that since the companycompleted the financing as a private company it does not have to revealwho purchased the shares, although she said management knows who theshareholders are. In October, 2009, the brokerage sold another10,111,732 CB Gold shares to less favoured, but still important buyersat 30 cents. Raymond James received 410,300 shares and $31,318 in feesfor this effort. The demand for the private company remained strong andfour months later, on Feb. 24, 2010, it sold another 9,524,446 shares at50 cents.
In May, 2010, after signing definitive agreements to option theproperties, CB Gold planned one final financing before going public. Adifferent brokerage, GMP Securities, agreed to sell up to 53.6 millionsubscription receipts at 75 cents, but that financing never happened.When the company went public in November, 2010, it was BMO CapitalMarkets that took care of the private placement, selling 59,234,086receipts at 45 cents, a steep discount from the original 75-cent plan.Attached to the receipts were 29,617,043 warrants, exercisable at 70cents for five years.
Going public
The company first revealed its plan to go public in February, 2010, whenit agreed to amalgamate with Peter Smith's floundering junior explorer,First Source Resources Inc. By April, the two companies signed adefinitive amalgamation agreement and in October the deal was done.First Source completed a 1:4 rollback of its 10,230,955 shares, givingFirst Source shareholders 2.55 million shares of the amalgamatedcompany. CB Gold shareholders received 122.54 million shares of theamalgamated company, making a total of 125.09 million sharesoutstanding. Mr. Capponi disclosed an ownership of 10,602,700 shares andMr. Baynham said he had 10,824,722 shares. At some point betweenincorporating the company and going public, 11.77 million shares thatbelonged to CB Gold's front men were transferred outside the realm ofdisclosure. Peter Barnes, a director of CB Gold, who was also CEO ofSilver Wheaton Corp. (SLW: $34.47), held 3,766,666 CB Gold shares whenit went public (he now owns 4,365,000), and Ana Vasquez, CB Gold'svice-president of business development and operations, held 3.08 millionshares.
There was one other disclosure that arrived in December, 2010, revealingGoodman & Co. Investment Counsel Ltd. held 11,111,100 shares and5,555,550 warrants, presumably from the 45-cent placement. (It has sincedecreased its holdings in CB Gold to 8,099,800 shares.) That means whenCB Gold listed, nearly 90 million shares belonged to unnamedshareholders, though the cheapest stock still belonged to the newpromoters, Mr. Capponi and Mr. Baynham. It is likely two of the mysteryshareholders are high-profile Colombian deal-makers, Serafino Iacono andMiguel de la Campa. They are listed as advisers on the company'swebsite and an SEC filing reveals at one point they each held an optionto buy 500,000 shares at 50 cents. The options expired on April 19,2011. Mr. Iacono and Mr. de la Campa are the men behind Pacific RubialesEnergy Corp. (PRE: $23.70) and a slew of juniors. Mr. Capponi and Mr.Baynham would have met Mr. Iacono and Mr. de la Campa when theColombians ran Coalcorp Mining Inc. and paid consulting fees toEndeavour.
CB Gold continues drilling. It has left some investors wondering aboutthe size of the mineralized area at its Las Vetas gold property, becausethe company has not released drill-hole locations, citing "competitionwith a neighbouring explorer." The company continues to expand itspromotional arsenal, having recently added Ross Beaty to its list ofwell-known investors. Last week Mr. Beaty's Lumina Capital LP acquired10 million CB Gold units at $1.10 per unit.
With 125 million shares issued under $1, Vancouver's newest promoters will need lots of good news to absorb the selling.