RE:RE:RE:RE:RE:****RCG RETAIL INVESTORS ROBBED BY BIG CORP !!!!!!***** Book value went up under George Young and down afterwards.
Perhaps that is a reflection of his ability to put deals together.
The market price seems to be completely disconnected from underlying value.
Severely overpriced in the summer of June 2016 and underpriced since March 2018. Many junior gold miners got beaten up with the low gold prices combined with the shift to pot and bitcoin. It hard to attach decline in stock price from 25c to 10c on George Young. If anything it might be some Lassonde curve thing with speculators coming and going.
date, eq-shares, shares, book
Mar 2017 Agreement to sell Corcoran
Jun 2017 8.5 123 6.9c tax-credits not explicit
Sep 2017 12.7 145 8.8c
Dec 2017 18.0 145 12.4 Corcoran sold, Credit Facility
Mar 2018 Sprott 9c private placement
Mar 2018 19.1 175 10.9
disclosure of error on Corcoran sale
Jun 2018 13.1 175 7.5 substantial tax-credits
The 9c private placement in March 2018 may have given investors a sense of value of their shares. It was priced close to market price, but below book value of 12.4c. It may have been a symptom of other things going on.
Significant is the private placement only brought in $2.85M.
Even then there was howls of dilution from some investors.
It was far from what was needed to fund operations.
The 30c warrants that were set to expire in October 2018 appeared to be trouble in March 2018. They would have brought in $8M.
Tax-loss credits are recorded in the Annual Report.
I see $15M as of June 2017 and $20M as of June 2018.
MD&A mentions unutilized tax loss credits in 2017.
In June 2018, management calls attention the substantial tax-loss credits.
Tax-loss credits are an off balance sheet item.
They are only useful if the mine is in operations.
The value per share of the tax credits has been decreasing with dilution.
Management has not priced the value of tax-loss credits. They might be worth a $5M premium over book as a going concern or 2-3c per share.
If the market isn't looking into book as a measure of value why bother with tax-loss credits.
There was an agreement to sell Corcoran in March 2017.
It was not a big enough deal to start Dufferin.
Corcoran is still on the books as of Sept 2018.
Hopefully it is finally resolved with the current process.
If nothing else it is a cloud that things are not going as planned.
I assume this is not a drag on book value.
Cash has been slow to come in after 2017.
Liabilities have been increasing.
Book value has been going down: 12.4c to 7.5c
Maybe there is isn't much of a story.
The 30c warrants might have been mispriced for a sour market.
Corcoran cast a shadow over a promising development property.
Fresh cash is required ... it was never sufficient.