RE:Tall or not at allGood discussion from you as always bovalena.
I would like to see consideration given to a stock buyback on the part of Teuton as the bear market bottoms. I would not necessarily like to see purchases made on the buyback immediately since there is no indication that the bottom has been reached. So I wouldn't want to see Teuton lose money on paper for its own stock as it has for Tudor and Decade (but not yet Sanatana which is interesting).
My best guess on how it would work is that TUO might put out an announcement of the buyback with a certain level of dollar commitment over a certain amount of future time, perhaps two years. The announcement by itself indicates that TUO has confidence that its shares are a good buy at current prices.
The goal of a buyback, more or less, would be to support the stock price a bit by making that statement of confidence and by taking the stock of the remaining weak hands holding it. That would also leave less weak hands out there who would jump at a stink bid for the company. Another goal would be to make a paper profit on the stock when it turns around.
The amount of the buyback would not be funded by the sale of any assets or royalties.. We have no idea at this time how many future assets we would be giving away. A bad deal on the royalty could be a much more painful outcome than a bear market paper loss - it could be several dollars per share - and that's all we have so far is a paper loss which we can minimize or exploit by averaging down our positions (which would also clear out some weak hands). The Dino buyback would be funded by incoming cash from the sale of existing options and warrants, plus money coming in from optionees this year and next. The magnitude of the buyback would also be limited to a few percent of the outstanding float since there are really not that many weak hands left out there. I can see that because the asks on the OTC are so much higher than the bids, and the low volume of sales at these low prices.
I think a limited buyback is a good plan. However, it might not work in the current environment where stock prices and the price of gold itself is determined by price manipulation and trading shenanigans. What I see in the current market, and this goes for many other stocks like Teuton, is that investors have lost confidence in the integrity of the environment. They are not putting hard-earned money into a rigged system. They've seen enough.
As for the Great Bear sale, it included the entire 2% royalty on all minerals mined on the Great Bear Project. Forever. In my view this was a horrible move by Great Bear Royalties. There is not even a maiden resource estimate on this deposit. GBR had no idea what it was actually selling. Looking at the drill results so far, the deposit could easily produce more than 20 million oz. Au. plus other metals. GB took a huge risk that the present value of the deposit is not much higher than what they sold for. I think it was a screw-up, just like the sale of QuestEx to Skeena for essentially nothing since Skeena got back $27 million by selling some of the assets over to Newmont. To the extent that holders of QuestEx got Skeena stock, they are bagholders with paper losses now.
This was also a horrible move by Royal Gold since they have no clue as to what they just bought. Kinross must drill 200,000 meters this year to find out. There is a good chance Royal Gold made a great deal, but the risk of putting a value on a prospect that has no defined reserves is, in my simple mind, nuts.
Same goes for the original Kinross purchase of Great Bear for $1.85 Billion last December. They bought this company knowing they will have to drill 200km this year to find out what exactly they bought. I'm sure they thought it was a great move at the time, but they have no clue as to how the PEA will ultimately come out.
Same goes for the sale of Great Bear by its management. They might have given away a once-in-a-lifetime world class discovery for $1.85 Billion that eventually would be worth easily $4+ Billion. Or not.
We have no idea how large Treaty Creek will be over the long term. I would hate for Dino to make a desperation deal at the bottom of a long bear market using the stupidity of the Great Bear/Kinross/Royal Gold actions over the past 8 months as the role model. We have 27.3 million oz. AuEq defined. My estimate is 54 million oz. by the end of 2025 minimum. I would hat to see us forego 25 million oz in additional royalties by selling now.
Dino can do a reasonable, smart buyback without giving away the store IMHO. I understand the pressure he must be under to take action.
As always, open to other points of view on both Great Bear and Teuton.
Do your own DD. GLTA. Doug