RE:RE:RE:Strathcona, Snowden dynamics, etcCWGriswold wrote:
Some very good points there edx. Thanks for the reply.
A couple of things
- I don't think Strathcona publically called out PVG management. RQ published comments provided directly to him by Strathcona. That was his choice to include them in the press release. He could have kept that private (at least for now) but I appreciate that he made them public.
True. But by publicly, what I meant was they didn't just resign and give a neutral reason. When celebrities split and they claim "irreconcilable differences" and that they're "still friends". That is the way to do this if in fact Strathcona needed to resign without eviscerating PVG. Strathcona didn't do that here. They (presumably) wrote PVG a letter with some extremely damaging allegations. RQ didn't have a choice - he had to publish those comments. Think about how bad it would be if he witheld that - he'd end up in jail as that is definitely "material news".
- If Strathcona is correct, I think it will more than temporarily hamper Snowden. It will be a huge hit on their business as they will be the ones wearing the stain.
True. Of course, if Strathcona is correct, then this wasn't a smear or hit job either - just the truth.
Do you think Strathcona had a predisposition about this deposit when they took on the contract?
Strathcona read the resource report up front and the drill history. They could have refused the contract. They oversaw the bulk sample process including the location of the cross-cuts. If they smelled BS they could have walked much earlier. According to RQ, it seems that the disagreement/lynchpin was in regards to processing of the entire buik sample vs. 30kg sample We also know that Strath wanted RQ to make public their sample tower results. Obviously RQ disagreed so all of sudden Strathcona walks and provides some very strong remarks about the deposit? Why? Wouldn't the Snowden approach be much more accurate?
I don't think so. I think they were hired to do a job and PVG/Snowden didn't like the preliminary results of their work, so they questioned Strathcona's methodology (as they have done publicly). I believe that this is not actually about a difference in methdology at its core, that's just the angle PVG/Snowden are taking to attack the messenger because they only have one possible way forward - mill the entire bulk sample and hope it shows the resource is reasonably close to what they have both claimed it is. Economic feasibility is another matter entirely, but neither PVG nor Snowden have any legal or fidicuary duties to shareholders on that side of things - only on the RE.
Also, why not wait to see the inital bulk sample results before walking? At that point they could have given RQ the ultimatem if their assumptions were proving right - if RQ refused then they could have walked wth 100% confidence that they were doing the right thing. Its like them saying "we think this deposit is not viable but give us the contract and we'll play along but don't question our sample results by milling the entire bulk sample or we're walking". Obviously milling the entire bulk sample is going to be far more accurate which should have provided confidence to Strath. So why was that the trigger for them walking? For me, it doesn't add up.
Probably because the "tower-sample" told them everything they needed to know to conclude that in their view: 1) the PEA was flawed and 2) the public statements of the company were misleading and they needed to publish their own findings as soon as possible. This would likely be the point where PVG/Snowden started worrying about the damage those results would cause and questioned their methodology. This probably resulted in some kind of disagreement/conflict where Strathcona felt it was being asked to "redo" their work or "omit" some of their conclusions to produce more favourable findings. If I was in their shoes that would be a definite cause for me to resign, both for their business integrity but also for the future viability of their business.
Also, when you say the minerals are there but are not mineable - on what basis do you think this to be the case (ie. mining plan? recovery?). Strathcona was quite vocal about the variability of the deposit - is that their issue? I'd say Snowden seems to have modelled the first 20% quite successfully.
Mainly based on the comments by Strathcona that called PVG management's statements about the deposit and mine life as misleading. As noted before, they have to be pretty confident to make a statement like that and they are the only party that doesn't have a vested interested to protect.
After that I had another look at the drill results. I am not an expert on these things, but one can easily see that there is high dispersion of very deep and narrow veins. I've read RQ's comments about how they intend to mine the gold, so yes I get that. But this is clearly not a trivial matter even if its possible to do that.
I only have the same information everyone else here does and based purely on that I cannot conceive a more plausible scenario than the one I've laid out. It is certainly possible there is undisclosed information that changes everything, or that implausible explanations are the truth - you never know. Strathcona may end up being wrong, but I think it's abundantly clear that they have to really believe what they're saying.