TXRogers wrote: Rhino wrote - "All I am concerned about is ARV fending off any raid or takeover until it is strong -then we are all winners. I applaud QH but he has had as many failures as DL - brought in a gravity plant from the Americas for Beatons Creek when we had far more expertise and better gravity gold production know how here -and his toy did not work ! I suspect you dont know enough about Australian expertise in the gold industry -mate we lead the world in most instances with our technology! Rest easy -ARV will raise a lot of money -will be on par with Novo in due course."
QH has been sent out to find gold. I expect that Australian expertise and even D.Lenigas will likely all be extremely useful and to the JVs advantage. And I'm sure these guys will find what their looking for. But in the background , I believe a much more ominous force has it's eyes set on ARV - and there isn't much QH or Australian know-how can do about it.
I would like to play a game with all you posters. It's going to be a game called "You be D. Lenigas".
But before we start the game I will lay down a few basic game conditions:
1)
75% of the world’s mining companies are headquartered in Canada. All over the world, companies listed on the Toronto Stock Exchange and run out of lawyer’s offices on Bay Street or skyscrapers in downtown Vancouver (whose real financiers may live in Australia or Nevada) are handling the mining game at home, throughout parts of Asia, South America and surprisingly, even with all the talk of China’s investment in Africa, it turns out that it’s Canada, not China, who is quietly dominating and exploiting African mining. All told, almost 1,300 mining companies based out of Canada are investing hundreds of billions of dollars in over 100 countries around the world.
https://www.vice.com/en_ca/article/wdb4j5/75-of-the-worlds-mining-companies-are-based-in-canada I lived in Toronto for over 45 years, and have been aware of Sprott’s exploits for over 30 years. Toronto is not a city of geologists, engineers, and explorers. It is city of Financiers. Bankers and Resource Financiers in particular. Extremely successful ones at that.
2)
Eric Sprott is spawned from the financial landscape of Toronto. He is the gold resource "Boy Wonder of Bay Street". He is not publicly considered as a folksy gregarious man. He may very well be that at home, but as an independent self-made billionaire, Eric has more in common with a Great White Shark. Smells blood and opportunity from miles away, and descends down onto his prey with ruthless precision. He is a very effective and well know businessman in Toronto (not to confused in anyway with being a compassionate man) when it comes to getting what he wants.
His vocation is closer to a banker than a mining executive. 3) KL + NVO = ES.
4) With regards to the NVO / ARV JV, the following is true:
- NVO controls and manages the JV
- ARV cannot sell the JV assets without NVO agreement.
- ARV cannot develop the JV assets without NVO agreement (as the legal managers).
- Whatever a cash rich NVO does to explore and develop the JV assets, ARV is obligated to fork up 50% of the costs.
- likewise, ARV is fully dependent on NVO to develope and bring income into the JV assets so that it can receive it's 50% of the profits.
- and finally, 50/50 joint partnerships are always difficult, so why ciontinue with them if you don't have to?
5) And finally, assume the results from Purdy's Reward bulk samples have finally come in, and they are stellar. A resounding support of a Wits-2 type geology. And stock prices for KL, NVO, and especially ARV all shoot up.
And now for the commencement of the game: In meeting with D. Lenigas, Eric Sprott decides to propose the following:
“As we all know, I am in control of NVO and KL , and what we are about to discuss in no longer in Quentin’s authority. I have full authority to make this proposal.
I am planning on initiating a full blown exploration program on all 38 JV tenements. It's going to unfortunately be costly, but I want to get full 43-101 issued on the resource. Not decided yet on a timeline for development due to all the other activities going on with NVO development. Not sure on ROI timeline.
Now, as you know I control the JV with ARV. And I see no further need for ARV participation
I would like to make you and your partners an alternate offer to cover your impending costs. I want you to sell your portion of the JV to KL (to me) for x-amount of shares, x-percent future royalties, etc. I really think my price is fair and it's not negotiable. And you get to benefit from the future KL activities and royalties going forward. I really can't see a better deal for you and your shareholders.
So you can make a lot of money now and prosper from the equity and future royalties I offer you, or you can spend the next few years raising money to cover your half of the costs. And as you know, without your cooperation I really do not need to bring the JV into production unless it's under my terms.
And since I control the JV, any external party or other Major that you may choose to discuss options with regards to the JV will only occur if I agree to it.
Here is the draft agreement on the sale. I'll give you couple of days to sign it.
Now posters, the jaws of the shark are opening wide. But it also comes with a rose. You are D.Lenigas, what are going to do?
I look forward to your responses.
TX
P.S. This is a classic business confrontation which I have seen before. It involves forces of differing power that ulitmately confront each other. And It is guaranteed to happen sooner or later.
It only occurs when the shark knows it already has what it wants, but understands that it is more prudent to expend the least amount of energy in the kill. I believe ARV is extremely close to this point. It's just business after all.