Where has all the money gone?
I looked back at the M,D&A for WPX and it stated they have raised $109 million in total, yet they have ,as of today, at a rough guess $3 million or less of that left.
That seems strange, especially when you contrast this with their neighbour and fellow junior Karnalyte who raised a total of $113 million but still has $67 million left in the bank.
Doesn't it seem strange that 2 juniors that have had to achieve the exact same milestones such as a BFS and an EIS have such a huge difference in costs in reaching these milestones.
In fact, it could be argued that KRN would have had more costs associated with these milestones when you consider that because of the Regulator asking questions about their feasibility study(questions that KRN ANSWERED AND PASSED WITH FLYING COLOURS), Krn had to incur fees for having to cancel their bought deal financing and then had to incur additional expense having Foster Wheeler and Ercosplan rewrite their BFS.
Yet even with all of the above in extra, unplanned for expenses, Krn was able to get to the point of having a completed BFS and EIS for approx $46 million(they also secured while spending that money a strategic partner and a 20 yr offtake agreement worth approx $5.4 BILLION).
Yet WPX has spent a whopping (approximately) $106 MILLION to get to the same point, but without a strategic investor or an offtake agreement.
Why is there a difference of $60 million between these 2 potash juniors to get to the same point?
Apologies but I don't have the answer.
But what I do know is this.
Wpx's management authorized lending/investing in different microcap exploration companies.
2 of these companies were exploring for either diamonds or copper.
Why do investors in a potash junior want their companies funds diverted to micro cap companies for the extremely risky exploration of diamonds or copper.
Isn't potash exploration risky enough?
Why did WPX's management authorize the "LENDING" of $4.4 million to an unlisted company?
Why are they still carrying the "LOAN" on their books as a receivable when the company that received the money stated they WERE DEBT FREE and had cash and securities of only $600,000.
Below are numbers from Wpx's MD&A
Wpx expects to pay rent in 2013 in the amount of $656,50,
Yet in 2012 Krn paid only $249,264 while maintaining both an Alberta and Saskatchewan office.
Investor relations increased $116,039 from $930,075 for the year ended September 30, 2011 to $1,046,114 for the year ended September 30, 2012.
Travel expenses for corporate development increased $209,568 from $989,793 for the year ended September 30, 2011 to $1,199,361 for the year ended September 30, 2012. Travel related to investor relations increased $175,757 from $171,132 for the year ended September 30, 2011 to $346,889 for the year ended September 30, 2012.
$1.2 million for travel? Are they staying in 5 star hotels all the time?
How can someone spend $1.2 million on travel. And what's even funnier is they have a separate travel figure for investor relations. It's an extremely cheap $346,889 for the year. What a bargain!
So combined in ONE YEAR, Wpx burned through over $1.5 million in TRAVEL EXPENSES!
Add to that the fact that Investor relations cost wpx an additional 1 Million and you have a total of $2.5 million
Karnalyte for the all of 2012 spent a total of $499,873 on all travel and on investor relations COMBINED, and they were back and forth to India all the time. Plus they actually got a deal.
Below is from KRN's MD&A.
Business development and investor relations expenses for the year ended December 31, 2012 amounted to $499,873 compared to $254,394 in the 2011 comparative period. In the year ended December 31, 2012 the Company was active in looking for ways to secure financing to move forward with construction of the production facility. The Company gave presentations, met with potential investors, updated current investors and continued to pursue potential strategic partners to secure the funding. The Company has also participated in various trade shows and secured a marketing agreement with a third party to assist with website development and maintenance, press releases and other services as required
Rent expense for the year ended December 31, 2012 amounted to $249,264 compared to $188,141 for the comparative period. The rent has increased reflecting a full year inclusion of additional space in the Okotoks office compared to part of the 2011 year combined with opening an office in Saskatoon in August 2012 to accommodate the additional engineers required for construction of the plant facility