from stockwatch 2020-12-22 16:41 PT - Market Summary
by Will Purcell
Andrew Lee-Smith and Ken Ralf's True North Gems Inc. (TGX), up one cent to 9.5 cents on 8,000 shares, is offering 10 million flow-through shares at 7.5 cents, seeking $750,000 for exploration. The company only has one property to explore, the True Blue rare earth project in Yukon. True North granted Mr. Ralf's Razore Rock Resources Inc. (RZR: $0.055) an option to earn a 70-per-cent interest in the project last year in exchange for $300,000 of work over three years and payment of 600,000 shares.
Razore did do a bit of work late last year on a "coherent rare earth element anomaly" that True North had identified 10 years earlier, but unfortunately, bad weather and cold temperatures -- in other words, it got a late start -- did not allow Razore to confirm whether the anomaly is worth pursuing. The company is "assessing the data ... with a view to establishing a further work program on the property," says Mr. Ralfs, speaking as Razore's president and chief executive officer. (He also is True North's CEO, having replaced Mr. Lee-Smith in March.) If Razore intends to carry on with its three-year earn-in at True Blue, it is unclear what Mr. Ralf's True North will do with its flow-through cash.
True North's balance sheet is still a wreck after its Aappaluttoq ruby and sapphire project in western Greenland went bankrupt just before it was ready to open. It ranks as one of the fastest bankruptcies ever -- it took just a few months from the default of True North's subsidiary's to its co-venturers gaining title to the mine -- and it left True North with $6.3-million in current liabilities and just $22,000 in assets.
Meanwhile, Greenland Ruby -- the entity now running the Aappaluttoq mine -- put the mine into production in 2017. Unfortunately for its owner, Leonard Nilsen and Sons (LNS) of Norway, progress has been slow. Greenland's website cheers: "In the middle of our primal mountains, there is red," but as Aappaluttoq's former owner can tell you, and now LNS as well, Aappaluttoq also has a habit of slathering red across its owner's financial statements.
At last report, Frode Nilsen, CEO of LNS, said that "production is fully up and running and we are already selling a fair share," but without the agreements with major distributors needed to increase sales volumes. LNS thought it might have such a deal, but that was just before COVID-19 hit. "We expect to make profits within this year when our major deals are signed, Mr. Nilsen had enthused, but there has been no word of any deals since then.
Regardless of Aappaluttoq's woes, True North still grumbles about the affair. It is still "assessing legal options to address the matters of concern," Mr. Ralfs grouses, those concerns being that True North believes that the "bidding process was mismanaged, needless[ly] expedited, unfair, biased and potentially in contravention of Greenlandic bankruptcy laws."