The accusatory comments that associate the Cohen team with the poor performance of the SP evolve over time, and influence those who convey them. For my part, I DO NOT ADHERE TO THESE THEORIES because they are baseless.
Nevertheless, there is one fact which remains and which unites us. This fact is that Robex's SP is completely out of step with its fundamentals and this concerns all shareholders. As misunderstanding has its limits, it is sometimes necessary to seek explanations elsewhere. Consequently, this publication aims to present to you A DIFFERENT VISION, supported by elements that go beyond assumptions.
To put it simply, I ask you to carefully read this paragraph from savecanadianmining.com, an organization supported by respected individuals and companies related to mining.
« In 2012 IIROC and CSA removed a trading rule known as the “tick test”, which restricted short selling to neutral or sales to positive price changes at the time of the sale. These changes were applied not only to the main listing venue of TSX Venture Exchange, but are equally applied across all Canadian trading venues, of which there are 14 today, reducing TSX Venture’s ability to effect any change. Since removal of the tick test, the Canadian markets have evolved, and there now exists a dynamic where short selling activities, high frequency trading, and algorithms are exploiting the lack of a tick test to the detriment of Canada’s junior markets. We call on CSA and IIROC to evaluate re-instituting the tick test. »
As these short selling activities are practiced on all small cap mining companies, without too much distinction, it is the whole sector that suffers. The majority of companies listed on the Vancouver Stock Exchange need to finance themselves on the markets and the pressure exerted by these short sales makes this financing very expensive, or impossible. The high dilution, or lack of financing, contributes to the deterioration of the sector; the impoverishment and general disinterest of investors. Thus, it becomes a favorable environment for HEDGE FUNDS, which can make tremendous profits. Nevertheless, the very negative consequences on part of this Canadian economy allow us to hope that this grouping will succeed in convincing the authorities that new rules must be applied.
HOW TO TAKE ADVANTAGE OF THIS SITUATION? It must first be understood that if this theory is correct, the pressure on the SP will continue to be exerted under the following conditions: No regulatory change; trading of Robex on the Vancouver market; insufficient volume of buyers; small market capitalization… If these conditions do not change, it would take a major event for Robex to be excluded from this grip of HEDGES FUNDS, and for the SP to increase according to the fundamentals.
However, a lack of regulatory change can also turn into an opportunity. The fact is that this pressure on the SP makes it possible to acquire shares at a completely broken price. Considering the operation of the Nampala and Kiniero project, Robex will generate 20-25 cents of free cash flow, after dilution, and these conditions will be favorable to the resumption of dividend distributions. The anticipation of such large profits per share cannot justify the current SP of 30 cents. This information simply cannot be processed by the HEDGE FUNDS algorithms so if we are not as fast, let's be smarter. I am aware that this scenario is pleasant for long-term shareholders but less so for those who were planning to change cars in the fall. Nevertheless, the low quantity of shares in circulation, less than 200 million (~60000000$), also makes it possible to consider a short squeeze. And as a regulatory change is always possible, the withdrawal of HEDGE FUNDS for this sector of activity would restore order.
Robex is not unique. Most mining companies with comparable parameters are experiencing the same difficulties. I have been analyzing many companies for a few months and this mismatch with fundamentals is very widespread. Even if Robex is still my favorite company, for its current results and its potential, I affirm that all those which generate positive cash flow; have few shares outstanding and no equity financing risk is expected (see note 1); should be viewed as opportunities. Know how to choose well and you will be rewarded.
Note 1: The SP of Robex is not an important parameter in the context of the acquisition of the Kiniero project. As it is a merger of the activities of the 2 companies, the quantity of shares to be issued has been determined in proportion to the value of the assets of the 2 companies. Therefore, I specify that the financing risk must be considered for companies that need it to pursue exploration activities or the development of an exploitation project.
In conclusion, I would like to state that the Vancouver Stock Exchange is definitely a breeding ground for rats, such as HEDGES FUNDS. The rules of this market are much more flexible and when they are not respected, the control mechanisms are insufficient and overwhelmed by the excessive activity created by algorithms and high-frequency trading. Consequently, it is useless to rely on the short sale report because the reality is quite different.
If you have shares of other companies, for which you believe to be concerned, do not hesitate to publish the link of this message.
Must Read: https://savecanadianmining.com/
GLTA