Post by
74volfram on Apr 30, 2015 6:38am
Comments to Kilgor and Ormonde News
Comments to Kilgor's two messages (italics):
1) Don't be surprised if this drops to half a cent. In my opinion there is very little chance of a default on the 10M loan to IMC. Dundee has already invested 25M in the Woulfe company and it is not going to let IMC have the mine for 10M on September 15.
2) With the lack of communication from our CEO. Lack of communication is a distinct feature of how this company conducts business. In November 2013 they warned that not much was going to be communicated to the shareholders from then on. Some things they have to announce, but apparently no promotionals. That is good and not so good: it is good for the major company who can wait holding the cards and cotinues to accumulate shares, it is not so good for the retail investor who wants a decent shot at making money in a reasonable amount of time.
3) The delay in financing. It has been 2 1/2 months since the termination of the Almonty deal and the appointment of the two new directors. This is not too long time to secure financing. The board is now mostly Dundee Resources, and there is a 450k bridge loan that should take Woulfe to the Summer. I think a deal will be announced well before September 15. before option expiration
4) The global economy of commodities. Commodity glut now looks likely to be easing with oil already in second moth of rebound and iron ore up 20% in 10 days. USD is also dropping due to now low probability of interest rates going up this year. Tungsten prices are presently below cost for most miners, with very little market activity. China will be implementing a domestic resource tax (similar to a VAT) on in-country produced strategic metals including tungsten. The new resource tax will increase the demand for imported tungsten and lift international prices. China objective is not to flood the world with Chinese resources at cheap prices, rather to deplete outside resources and make money in the process. They have come a long way in terms of smart international trade a very short time. As prices start going up there will be a rush to replenish inventories. Whoever had bet on prices falling after lifting of quotas and export taxes will be disappointed.
5) We can expect nothing to be done for a few years. Obviously the breakthrough would be the announcement that financing is coming. But the company may be very quiet until the day financing is secured. A few years? I do not think so, with IMC loan due and Sangdong issues.
6) It's the CEO job to be transparent and communicate to the shareholders. I agree Gaucher has not performed well in this duty. Maybe he is tasked with keeping things quiet and below the radar screen. fact is just about the only piece of communication he has done has been the flimsiest interview to Metal-Pages in January. There he said the Sangdong mine would be producing by the end of 2016.
7) Again, this support my position that our CEO is out of his depth and needs to be replaced. I don't know about "out of his depth": Gaucher was quite well known big entrepreneur in his younger days in Quebec. I do think he will resign at the next AGM. Likely to be replaced by Goodman/Howlett team. These two have long worked together at Cogitore/Dundee Resources.
Ormonde News Release
The Ormonde NR is real news for today. Thanks to Wolfry for the find.
https://www.lse.co.uk/AllNews.asp?code=2gg4l4je&headline=Ormonde_Discourages_Almonty_Takeover_In_Favour_Of_Oaktree_Financing
Reading the Ormonde news release, I have to say I now understand why the merger discussion was terminated by Woulfe management. At the time, Woulfe engaged Toronto's Micon International to evaluate Almonty and Micon is one of the two companies retained by Ormonde in their due diligence on Almonty. One can only assume they provided the same Almonty intelligence to Woulfe that they have now provided to Ormonde, which is quite negative. Woulfe was probably bound to non-diclosure because the merger proposal was presented as consensual. So it seems that was just a bad proposal to Woulfe and now it will be Dundee/Woulfe carrying on by themselves waiting for IMC to come through with the 25% offer (hence the 450k bridge loan).
Why does the SP continue to drop?
SP has been falling since the termination of the Almonty merger proposal. Back then investors maybe assumed Almonty had uncovered bad news during dd, and sold off their shares. Quite the opposite, given what we know of Almonty now from the Ormonde NR, the SP should have gone up sharply after the merger proposal failed. Lack of meaningful communication from Woulfe is certainly to blame here, and there is also the objective fact that the SP drops each month after the dreaded "cut and paste" so-called "progress report". On top of that this month there is also uncertainty due to the request of Almonty for early repayment of the 150k loan. The Dundee Resources bridge loan should have taken care of that, but in the absence of clear communication that is obviously not enough to reassure investors.
Comment by
abc111 on Apr 30, 2015 1:34pm
As always really appreciate your in-depth opinions! Thanks again for your inputs! You became a real asset to our board, imo. I'm a fan, how can i say more? lol