Bad News FridayFriday release, after hours - rarely good. Looks like management has spent the last of our cash on buying more property. Appears this team does not understand that a junior miners value is built through exploration, drilling and results. David should turn Tomagold into a land management company. In 18 months $2.5 million squandered.
1. Because LOT excused several $million of exploration obligations with the last financing, Iamgold will own the next 25% of Monster very soon (totalling 75% ownership). The last financing for Iamgold in reality was really at $0.045 per share, not $0.09 once you account for the extra concessions given to them.
2. Buying QIT's 5% at $500,000 sets a valuation of only $2 million for Tomagold's 20% of Monster. Not good.
3. Tomagold last 3 years has been high overhead, no material drilling programs, bad decisions, poor deals and major dilution.
Sadly, this is why the market values Tomagold at only $7 million. Very worried at what sort of deal is around the corner given no cash, no leverage and a history of questionable deals. We just told the world our soon to be 25% ownership in Monster is worth $2.5 million. Question: What did David, Martin and the BoD do with the last $2.5 million they got their hands on?