Finding credibility
It is very difficult for a new issuer to find goodwill in the capital markets. Historically, and we all have a story to add to this, not every company has told the truth or, in some cases, even known what the truth was, leading to jaded hearts, apathetic ears and wallets that stay closed. New issuers suffer for the sins of the old.
But. All is not lost. Building credibility is a process, not an event, and with persistence, transparency and accuracy, a new company can find a welcome home in a portfolio.
One such issuer is
Silver Bullet Mines Corp. (TSX-V: SBMI, Forum). SBMI has been very clear about its business plan (get into near-term revenue by re-opening the Buckeye Silver Mine in Arizona) and its timeline. Originally that timeline was to be in pilot production in Q4 2021. SBMI missed that deadline, but was immediately straightforward about the reason why and how it will be remediated. More on that below.
In a very short time SBMI has shown a larger-than-average willingness to share day-to-day information on a regular basis and to share historical information that many other mining issuers would consider confidential. Its Twitter feed @BulletMines is one of the most informative in the industry with new pictures or videos from the field almost everyday, showing the team is doing exactly what it said it would do.
We’ve all heard of the public company leadership teams that avoid the shareholders, except for the three weeks before the shareholder meeting. SBMI is the opposite. In the two months since it listed, SBMI has shown a commitment to transparency, to regularly engage with the public and to provide granular levels of detail. If you contact the capital markets team or the CEO, make sure you’ve budgeted enough time to get a thorough answer to your question.
Anyone with a word processor can write a press release that meets minimal disclosure requirements. It takes a great deal of effort to write the kinds of press releases that SBMI has been disseminating lately. The press releases are tied together telling a coherent story, showing a mindfulness of the larger picture and a willingness to share it.
Here’s an example. That delay in getting the Buckeye into pilot production? SBMI told us in early December that it like most of the world was suffering from supply chain issues, and it has mill equipment slowly coming to it in a shipping container off Long Beach. Every press release gives us more insight into when and where that equipment is. We know from the data flow in the press releases that from the time the equipment hits the millsite, the field team will need 25 – 30 days to complete installation, and from the Jan 27 press release we see the company expects to be in pilot production in roughly sixty days. SBMI has been updating this set of facts as the container has moved further into the harbour and closer to being unloaded. Because we know this risk, we are comfortable with it. It’s a question of when, not if.
Another example would be progress at the Buckeye Silver Mine site, where we’ve been treated to media of the field team clearing the Western adit, timbering, running ventilation, inspecting the underground, building roads, blasting underground and generally improving the property. We’ve been able to see the minesite evolve from a rough hole on the side of a hill to the point where the team is extracting mineralized material from the Buckeye to stockpile, in anticipation of that equipment clearing Long Beach and making it to the millsite. Every day, doing what they said they would do.
Finally, the millsite has been a joy to watch. Last spring it was an empty field. Now it has a mill pad, the crushers are installed, the conveyors are going in, the assay shack is up and ready to go, the laydown yard is ready, security has been improved and a new septic system has been installed. The pictures have shown us the growth of the millsite. Forms for cement get built, the cement gets poured, it cures, the equipment gets installed. It’s been like watching a watch get assembled. Exactly as they described.
And that’s how you find credibility in the markets. Tell us what you’re going to do, and then go do it. Assuming they continue with their transparent story-telling and wonderful media, SBMI should give its shareholders comfort as it executes on its business plan.
FULL DISCLOSURE: Silver Bullet Mines is a client of Stockhouse Publishing.