I'm a bit concerned about a death spiral financing. That is where someone who is about to go long in a PIPE has a market maker go short millions of shares and then they buy into the PIPE to cover. This accomplishes two things:
a) they make a ton of money on the shorted shares because every swath of selling pushes the price lower and they have a guaranteed avenue to cover with the PIPE
b) they get their PIPE shares cheaper and thus more of the company for the same amount of money since the PIPE is usually done at a % discount to the last week or month's average trading price
I sold the vast majority of my shares until I see where the money for Rex is coming from. If Sandstorm gives them another $5M for another X% of Rex or Rosa production then life is rosy. Otherwise they are in a tight spot where a financing could be highly dilutive. Rosa may be cash flow positive but it is doubtful without the 2nd wash filter.
At this point they are practically bankrupt. They owe Sandstorm $3M which is all the cash they have on hand and they will owe another $5M at the end of 2012. And who knows if they are making good on selling Sandstorm 25% of Rosa production at $75 a ton. If Sandstorm wanted to push them into bankruptcy they could IMO.
Neil doesn't return my phone calls or email and this isn't a good sign in my experience. If someone in the know at the company isn't willing to talk to at least some investors, its a bad sign. Nobody posting on this board has a direct link to Neil. I have another stock Mart Resources that has done very well despite the CEO being hard to reach - but there are at least a couple of investors that he communicates with and keep shareholders in the know.
Too many unknowns. I like the story and would buy back in if the picture gets clearer. If Rex costs are really $110 a ton as someone claimed here they aren't going to make a ton of money on Rex selling 75% of the coal at $140 and 25% to Sandstorm for $55-$75. That's only $15 a ton profit. If met coal prices tank a bit more they'd be a non-profit entity...