RE:CGN Investment MotivesSelwyn Resources accepted an investment from the Chinese and the same thing happened. Selwyn is now a private company "SelwynChihong Mining Ltd", a wholey owned division of
Yunnan Chihong Zinc & Germanium Co Ltd, a fully integrated zinc-lead exploration, mining, and smelting company based in Yunnan Province, south-west China. CatchTheKnife wrote: CGN invested in what they probably believe is the best property in the junior uranium sector. The whole scenario, however, strikingly resembles that of Baja Mining several years ago. Baja held a world class copper deposit, copper prices were depressed, the CEO held a sense of entitlement and a minority interest in the property was held by a Korean conglomerate. Rising costs to build towards production and frivolous spending resulted in the project requiring additional funding on multiple occasions. With a tightened credit market, Baja was forced to accept funding from the Korean conglomerate and to continually give up additional interest in the company to the Koreans until Baja's ownership had dwindled to around 10% with the possibility of losing more ownership. If the uranium price doesn't recover in the next few years Fission will burn through the investment from CGN and be forced to look for additional financing. As a 20% partner and with a seat on the BOD, CGN is in a position to leverage themselves as the financier and may use its cash influence to obtain a majority interest in Fission. Once they have achieved a majority interest Fission's shareholders will be at their mercy. The Golden Rule in the world of finance: Them With The Gold Makes The Rules. Fission may have acquired a significant amount of capital for exploration and/or advancement, but they have also given up some leverage. I believe that this risk is what is being reflected in Fission's share price and target price reduction.