Dear Sirs:
I looked at the consolidated financial report on SEDAR for the 3rd Quarter 2019 reported for GZZ, to get the consolidated numbers..
The OVERHEAD expenses for the Q was a bit over $1MDollars, including salary, stock compensation, general and administrative, legal, consulting, filing etc..etc.
You DO get the picture. That is a run rate of over $4M per year. You have a $130M market cap. SHEERHOLDERS are paying about a 3.5% or 4% managment fee on an annualized basis JUST TO KEEP the DOORS open.
Seriously, why notconsolidate the GZZ/RZZcompanies in a stock for stock merger and do the SHAREHOLDERS who own the companies, BOTH, a favor.
Interestingly, Jospeh Groia is on the BOD of GZZ. He is supposed to be the expert on Canadian Securities Law. He wrote the book. When does this kind of corporate managment and corporate governance become an actionable item under a classaction or a shareholder to bring a derivitive action Joe. Perhaps Glenn and Ian should consult with Joe G.
Ian Ball likes to hold himself out as another potential Warenn Buffet or WB protege or wannabe. It's not true, It's a sham. I can easily prove it.
IAN BALL will not discuss with his shareholders WHY they would continue to run 4% overhead on what is essentially a passive investment in the Malartic Mine royalty, Agnico Eagle Investment, and Yamana. That is, to BUY GZZ/RZZ management acument, we as shareholders have to pay a 4% annual managment fee which means whe have a 4%hurdle rate of return to overcome on an annual basis before we really make any money.
We have sat here basically doing nothing for 3 years while WAITING for the CASH FLOWS of Malartic Royalty to finally start to pay off.
He will not discuss why he has RZZ buyback a small about of their shares in the open market, at a higher price than if he were to buy RZZ shares thru the proxy shares GZZ, even when he has a GZZ director Glenn Mullan sitting on the RZZ Board.
Here is the simple math to justify why RZZ should use its cash to buy GZZ stock in the open market instead of RZZ stock. Because it trades at an even greater discount to FMV than whatever RZZ trades at! Assuming that Ian Ball thinks that RZZ trades at a discount to FMV thus a good use of company cash is to buyback these shares in the open market.
GZZ has 133,918,577 shares out at last count. At .29C Can that is $38.84M market value. GZZ has a few other insignificant assets in cash, royalties, and other company shares and option/promote/buy-in agreements on leased land. Maybe worth a few $M.
They have NO liabilities of any note. GZZ does OWN 5,605,246 shares of RZZ, at
$10.60 per share that is worth $59.41M Can.
So, IAN why buy RZZ stock in the open market when you can buy GZZ stock which holds almost 50% of RZZ shares in the open market at a valuation discount of about 35% off? We as shareholders PAY you two people good $$ to maximize shareholder value. GZZ has a few $M in some other assets and NO other significant liabilities.
On the margin, RZZ should sell some of their position in Agnico and Yamana to buy back RZZ shares at a discount of 35% thru purchases of GZZ stock.
On the margin, GZZ management and BOD should sell some RZZ stock in the open market and use the net proceeds to buy GZZ shares in the open market......at the 35% discount. The effect of this would be to increase the pro-forma ownership of RZZ stock for each and every remaining share of GZZ held by continuing GZZ shareholders.
This IS really very simple CorporateFinance 101 stuff. Any investor worth a grain of salt could figure it out to do it. For about 3 years by my count you to have FAILED shareholders of both companies by not taking advantage of this corporate opportunity staring you right in your face.
In my opinion it is disgusting and a travesty of corporate governance that could and does exist in Canada on the TSX and TSX-V for far too long with far too many companies.
I owned RZZ in the past but currently only own GZZ and am tired of waiting for you two to do the right easy thing here! .