RE:RE:What If Renaud Hinse Wanted To Play, Santa Claus?Fbedard:
The major shareholders cannot hold more than 20% of a publicly traded company without making a formal takeover bid for the company. If a share buy back plan was introduced, which it should be, if Mr Hinse endowed Abcourt Mines with the Elder Mine royalty, then our Christmas Santa dream would be most helpful to the upside in the share price.
https://www.osler.com/en/resources/cross-border/2013/becoming-a-10-shareholder-of-a-canadian-public-co "What Happens if I Become a 20% or Greater Shareholder?
Do not become a 20% or greater shareholder without first speaking with Canadian legal counsel. Canadian securities laws prohibit acquisitions of outstanding securities of an issuer that result in an investor holding 20% or more of a class of voting or equity securities of a Canadian public company without making a formal takeover bid (that is, a public tender offer). There are a few exceptions to this requirement, including purchases through private agreements and limited public market purchases, but it is important to get specific legal advice about them before increasing your ownership level to 20% or more."
Fbdedard, also remember that the earnings evaluation, made by analysts, for a publicly traded company are based upon the number of outstanding shares that currently exist. It doesn't matter if a large number of shares may be held by insiders who may have no immediate plans to liquidate their holdings, anytime soon.
You fbedard, also have millions of shares available to trade but you appear to have no immediate plans to sell them. It just doesn't matter to the market because these shares may be freely traded and at any time.
So if a share buy back was to occur, Mr. HInse, Mr. Mestrallet or anyone else holding 20% of the company's shares would also be forced to sell some of their holdings or be required to make an offer to purchase all the company's assets. It's called a formal takeover bid (as above).
Reducing the number of outstanding shares of a profitable company is unlikely to cause a reduction in the share price. Only unsatisfactory financial quarterly results would likely result in that.
By the same token, a share buy back plan doesn't result in an immediate jump in the share price.
It takes time for the share price to consolidate at many different levels. A lot depends upon investor sentiment in the likelyhood of a greater shareholder reward to come at a later date.
It is nonsense to think that some selling by any insider might be considered a conflict of interest. Buying and selling by insiders of much bigger companies is done all the time. Elon Musk just dumped 10% of his holdings on the open market and no one raised as much as an eyebrow.
As far as private placements are concerned, they should be avoided at all costs. Increasing the number shares in a company's public float actually proportionately reduces the value of the company's shares, unless they have been made, to make possible potential mergers or acquistions.
Usually these public offerings are tendered by junior explorers who have no immediate cash flow coming in to their company's coffers. Profitable miners should not engage in this activity unless truly necessary.
Regarding the Barvue project, all alternatives to private placements should be actively explored first. This might include government grants/loans or private financial funding (banks, private equity, etc). If an additional private placement became necessary to fund that mine's development costs, then a spinout of that project, might be considered, as long as all parties involved inhe process are in full agreement.
Such a spinout should involve the provision for a reverse split in the share price (say 10 to 1), but only for the portion of the new company that has been created. Thereby, the apparent loss of value for the original company's shares would become much less. That would also allow for many additional private placements to be made for the secondary company, also without effecting the original company's net asset value.
Any reverse split to fund the Barvue project without a spinout would likely be disasterous for the company's share price in the short term. These kind of reverse splits never turn out well!
And with today's cheap share price, it just couldn't happen! The funding required in the many multi-millions would make the cost for Abcourt Mines untenable at today's extremely low valuation.
In any event, the company needs a higher and longer lasting share price. Good stock promotion could help. But Dany does need something of greater value to properly promote.
As always, it's up to management to get the job properly done. The question remains, will the company have the insight, experience and qualifications to accomplish that end? Changes are coming and change can always be made. Nothing is written in stone!
And it doesn't hurt to dream!
the best! Java