RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:You got to love the IrishSo, Sparks, you’re a newbe with cash. Your recent post mostly repeats what you said in your earlier post. One condescending little sentence rather annoyed me and highlighted your lack of understanding of the key issues at the heart of this discussion – “Old/new shareholders that’s irrelevant”. Sorry, Sparks, in this case it’s very relevant. As Buffet would say, the only real shareholders in a stock, are long. This stock has two groups of long, Old longs like me, and New longs like you. We both agree that with the closure of Argyle, Mountain Province’s value per carat has gone up and it is in a better cash flow situation than ever. But there is a huge difference between old longs and new longs. Old longs paid dollars for each share they hold, new longs have paid cents for each share they hold. Old longs have had many sleepless nights suffering the pain of seeing the share price drop from 7 Canadian dollars to 25 Canadian cents and their investment close to being completely wiped out. New longs are already making money on their investment. Old longs know that there are a lot of things that can go wrong. New longs, like yourself, think everything in the garden is rosy and will continue to get rosier. You BET on covid not affecting production, finding new pipes at Kennady and dividends resuming in 2025 (or before if any deal is done on Kennady). It’s all speculation. You are not Management who, on the contrary, see many potential pitfalls ahead (as indeed have befallen the company in the last 2-3 years), and are advising caution and are recommending the Proposed Arrangement as the best available option within the tight timeline available to the company (eleven months to 15 December) and in the best interest of all shareholders.
You’re a smart guy, Sparks. You are, after all, a new long with cash, whereas I’m an old long with little cash. You want me and other shareholders reading this blog, to vote against the Proposed Arrangement, like you (PLEASE correct me if I’m wrong). All this nonsense about, to date there has been no suggestion of an early payment on the bonds with this money. You know very well that the company will need the US$25m facility only in the short term and that it will be paid back quickly from its improving cash flow. What are they going to do with the US$50m then, other than pay back hostile bondholders?
You obviously would like a rights issue. We have had rights issues before, but not with the share at such a low price. The last one, if I remember correctly, was in 2015 when the subscription price was at a 16% discount of the 5-day average. A rights issue at this time with the share price (we both agree) so undervalued, would destroy the investments of old longs, like myself, who could not afford to take up our rights. You, on the other hand would be able to take up all your rights and pay us a pittance for the rights we can’t afford to take up. Your interests are clearly not aligned with those of us who have been investors in this company for a very long time and have stuck with it through thick and thin!
In a previous post you claimed to be the champion of old longs, like me. (You surely couldn't have been including yourself?) “Shareholders have been through the mill here they have largely hung on through thick and thin so its important that when everything has finally turned around that they get a fair deal”. You think that diluting my shares by 50% is a fair deal. Are you kidding me? We both agree the shares are a steal at the current share price. Go buy all you want in the market and stop trying to give old longs with little cash, like me, more grief.
Ultimately, we’ll have to rely on management taking the best decisions in the overall interest of shareholders who have stuck with them through thick and thin.