RE:RE:RE:GOLD is FlyingIt's a disturbing story. Mast was guiding in end 2015 in the press releases for 2016 to be a banner year with great production increases at San Dimas. Then total chaos breaks loose.
I would be beyond embarassed if I were Mast and even Conway for that matter after such a stellar career at IMG. It truly is sad. This San Dimas asset has been a bloated pig from the beginning. The difference is that in the old days the ore was flowing, workforce on the ball, and the positive tax ruling in 2014 from the Tax Bureau in Mexico caused shares to reach historical high. But then reality began setting in.
Open pit at Black Fox began depleting end of spring early summer 2015 (May-June specifically when still around $ 5.20 a share) blah blah blah then the tax news with ruling that hit February 2016. I still remember the day exactly.
BUT NEVER did I expect to see the
SAN DIMAS OPERATION ITSELF be the cause of P's downfall.
These are absolutely technical/corporate aspects of the corporation: the mineralization of SD, depleted veins at SD, and a horrible corporate culture and horrible management concerning SD workforce that has caused P's downfall and has CONSTRICTED ALL FREE CASH FLOW COMING OUT OF SD. TAX ISSUE IS STILL UP IN THE AIR AND I RE-ITERATE IS NOT THE CAUSE OF THIS COLLAPSE AS IT IS STILL IN ARBITRATION/DISCUSSION & PRIMERO HAS YET TO PAY ANY BACK TAXES.
As you say even if WPM does agree to re-negotiate the stream, where is P getting the cash flow/funds to explore deep in the underground the other veins? They are tapped out. That is why shares are 9.5 cents because Mr. Market sees no way for P to remain its own entity.
I was a big Primero bull back in the day. But I have seen the reality now -
the situation is EXTREMELY TERRIBLE & SAN DIMAS OR MORE LIKELY ENTIRE CO. WILL BE ABSORBED. JIN Czicfwillgetermit wrote: You make some valid points. I am not as concerned about them crying about deleted veins when they have 24 other veins they decided to ignore during this ramp up that made money at 1100 gold with same lame union. These guys were forecasting 200k oz and 700 aisc in jan of 2016 before tax issue hit and mine fatality that was public reason for slowdown and mine revamp. So were they misinforming shareholders then about resources or misinforming shareholders now. Hard to say.
The long stall on tax issue is a mystery. But as a negotiating tactic to PR that veins are depleted is arguably a better strategy then stating san dimas is loaded with gold and we can afford any new tax or strem deal you can throw our way so to speak. Its also better for wheaton who needs to sell any deal to its shareholders and put other miners on notice you better be on death's door before we throw you a lifeline.
Whaeton may or may not continue to backstop revolver. I personally think its in their best interest to keep P alive and continue with a modified but still very generous stream deal.
This buys time and maybe increased gold and silver production and prices saves the day at P. We shall see..