VANCOUVER, Canada -- Question and answer time. We ask questions. CEOs answer them … or don’t. You decide.
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Premium Exploration (TSX: V.PEM, Stock Forum) – The stock as of Thursday midday is been halted from Canada trading. The situation, four days running now, is either a huge opportunity for investors or a bust. The Idaho and Montana prospector says the trading halt is pegged to a “hugely complicated” merger transaction and revised royalty rights for property owners.
We dropped Premium as a Planetary Prospect of Ticker Trax™ several months ago. Largely, our subscriber service concluded the explorer had promising gold properties in the form of Friday Petsite and Buffalo Gulch in Idaho. Indeed, the scale of any success at those properties, which I have visited, would be, to borrow an adjective, “huge.”
Yet we concluded the chance of a 10x-return for this tiny company was remote … because of the need for fresh and massive financing cash that will water down current shareholders. (Another catch-up with British Columbia securities regulators occurred several weeks ago; it centered on the way Premium Exploration characterized data from its Idaho property or properties.)
A 25-cent financing for the 35-cent stock, as much as $10 million Canadian, is in the works and is subjecting Premium to scrutiny. Del Steiner, a Premium founder, chairman and lawyer, tells me a merger transaction announced last week, late on Friday afternoon, is before British Columbia regulators. Premium shares trade on the TSX Venture Exchange in Canada.
Mr. Steiner tells me this is routine. I asked for his reasoning.
“Merger,” said Mr. Steiner. Del’s wife, Ellen Steiner, is a shareholder in one of the entities in the transaction(s) that are on Premium’s table this week and last. “Laws are the same for PEM as Newmont. Hugely complicated and non-arms length. Patience is the rule of the day.” My reply: I don’t believe I recall ever seeing Newmont Mining (NYSE: NEM, Stock Forum) shares halted for four days running.
Wilf Struck, geologist and Premium CEO, labels as “goofy” some of the original terms with Clearwater, one of three entities that under renegotiated 
terms is releasing control of central Idaho gold properties in return for cash and stock. “The deal with Clearwater was an open-ended realized price royalty, goofy ... an uncapped gross royalty on production from Buffalo Gulch that would have gone on forever. I went back and negotiated … a reduced cash payment by 40% and converted the gross royalty to a net smelter royalty (NSR), so that cleans that whole transaction up,” he says.
As for some Premium shareholders who thought Premium’s four main Idaho gold prospects were already “in the bag” in terms of ownership, Mr. Struck says, “We controlled all the properties under letters of interest but not a definitive agreement.” Two of the entities in this revised property sale/merger/negotiation, Kria and Valencia, are Stan Bharti companies from Canada.
On behalf of Ticker Trax, I am impressed with the scale of Buffalo Gulch and Friday Petsite. (Please see original report – for free.) Impressive, that is, as long as assay results continue to strike vast mineralized zones as drilling thus far reveals. Still, what we try to screen from our subscriber service is any paperwork, language or transaction that is remotely complicated. We at Ticker Trax told subscribers in early May that we were taking Premium off our research list. We stepped up our search for Colombia, Mexico, USA and Africa (Ghana and RSA) prospectors with attractive risk-return metrics that approach 10x for a two-year time frame.
One believer in Premium Exploration regardless of these merger machinations is Robert Moriarty. (That is Bob at a tour of Antioquia Gold’s Cisneros Project in Colombia from February of this year – Thom Calandra photo.) Bob and his 321gold service reviewed in positive fashion the Idaho properties about three weeks ago. I asked Bob Moriarty whether he was concerned about the regulatory scrutiny and trading halt. He told me today (Thursday), “No. Not at all. The deal is confusing but I think they will be fine.”
PLEASE VIEW THIS VIDEO : Why Hard Assets?
https://www.moneyshow.com/video/video.asp?wid=5812&t=3&scode=019215
For more on our 12 Planetary Prospects, please visit our Ticker Trax Library. We here at home do not own shares of Premium Exploration. We sold the shares (for about what we paid for them in late 2009) in May and in June, well after advising subscribers the company was removed from our list of Planetary Prospects.
Ticker Trax™ is in place – and thriving – because its fiscal loyalty is to subscribers who are looking for radically cheap investments. Our service, started in November 2008, researches a select group of Planetary Prospects with legitimate shots at rising 1,000 percent or more in the span of two years, maybe less and maybe more.
- We hope you out there in the Stockhouse audience consider joining our expanding service, now in its 18th month. It is at www.tickertrax.com. Ticker Trax costs money. Needy wanna-be subscribers can petition Stockhouse with a plea and a suggested price for the $399 service at members@stockhouse.com.
Thom Calandra owns stakes in each of Ticker Trax Planetary Prospects.
Ticker Trax™
Please see Stockhouse for a selection of our Ticker Trax research and our password-protected library for subscribers. Please see our Ticker Traxpassword-protected library for coverage of copper in Peru, gold in Peru, gold and copper in Colombia, gold in Ghana and silver in Mexico.
(All photos by Thom Calandra. Thom and his family own shares of each of the 12 Planetary Prospects. Thom’s personal holdings are available for all to see on Stockhouse, the Canada publishing company. Subscribers are informed well in advance of any shift in research regarding Planetary Prospects and any purchase or sales decisions.)
Ticker Trax™Please see tickertrax.com to learn more about this wealth service and its Planetary Prospects. For an index of free Thom Calandra articles, please click here. For an entire explanation of our strategies, research methods and disclosure procedures regarding all aspects of Ticker Trax and our Stockhouse reports, please visit our readily available Stockhouse articles. Please see this one in particular: Core Box Revealed. Thom Calandra’s on-site tours of properties are paid in part by the hosting companies and in part by Stockhouse and Thom Calandra. For the password-protected Ticker Traxlibrary, please see: www.tickertrax.com/Login.aspx.
HOLDINGS: Thom’s holdings are listed for Stockhouse members at www.Stockhouse.com under the “portfolio setting” for user TCALANDRA. It is public and free to view. He and his family own recently minted gold and silver coins and shares of about 30 public and two private companies.
THOM CALANDRA of Ticker Trax helps his audience find value in a quagmire of investment choices. Thom co-founded CBS MarketWatch and MarketWatch.com. As the voice of Thom Calandra's StockWatch and The Calandra Report, Thom pegged $300-ounce gold as a long-term hold in 1999 and in 2000. He has been covering life-sciences and natural resources since 1988.
Thom Calandra and Stockhouse produce this and other free reports. Please visit www.Stockhouse.com.
Ticker Trax™ is published by Stockhouse Publishing Ltd. Ticker Trax is an information service for subscribers and neither Stockhouse nor Thom Calandra is a broker or an investment advisor. None of the information contained therein constitutes a recommendation by Mr. Calandra or Stockhouse that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Ticker Trax does not purport to tell or suggest the investment securities subscribers or readers should buy or sell for themselves. Subscribers and readers of Ticker Trax should conduct their own research and due diligence and obtain professional advice before making any investment decisions. Ticker Trax will not be liable for any loss or damage caused by a reader’s reliance on information obtained in the reports. Subscribers and readers are solely responsible for their own investment decisions. Opinions expressed in Ticker Trax are based on sources believed to be reliable and are written in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. All information contained in Ticker Trax should be independently verified. The editor and publisher are not responsible for errors or omissions or responsible for keeping information up to date or for correcting any past information. Ticker Trax does not receive compensation of any kind from any companies that may be mentioned in the report. Any opinions expressed are subject to change without notice. Owners, employees and writers may hold positions in the securities that are discussed in Ticker Trax. PLEASE DO NOT EMAIL THOM SEEKING PERSONALIZED INVESTMENT ADVICE, WHICH HE CANNOT PROVIDE. Copyright 2010 all rights reserved.