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Ryan Gold Corp. (TSX: V.RYG, Stock Forum) (13 cents)
https://www.ryangold.com
Financials Ending September 30th
Cash: $21.3 Million
Investments: $361k
Accounts Payable: $67k
NET Cash $21.5 million = 18.4 cents per share
Shares Outstanding: 117 million
I have been tracking Ryan Gold since Q1/13 - waiting to see if they put their war chest of cash to good use. So far they haven’t but I am hoping 2015 is the year they get off their A$$ - News December 11th "may" be the first indicator that will happen.
In December RYG announced that the Chief Operating Officer of Dundee Corp (Mark Goodman) would take control of Ryan Gold as the new President and CEO. Mark is the son of well known (and well respected) mining financier Ned Goodman - President and CEO of Dundee Capital Markets and Dundee Corporation. [www.dundeecorp.com]
RYAN GOLD BACKGROUND
May 2011 Ryan Gold raised $52 million near $2 per share and subsequently managed to waste the majority of it on grossly over-priced moose pasture that was brought to the table by an over-promoted geologist named Shawn Ryan.
https://www.nytimes.com/2011/05/15/magazine/mag-15Gold-t.html?pagewanted=all&_r=0
The share price has been falling ever since.
If you take away the big bank account, Ryan Gold borders on a sad joke - especially for tired shareholders. The company hasn't accomplished anything in three years and even their website is so outdated that their corporate presentation is from July 2011.
This has been management complacency at its Finest! The new CEO is the first sign I have seen where something may finally get done in 2015 to rebuild shareholder value.
While hundreds of small public companies struggle to stay afloat and many can barely pay their listing fees, RYG went merrily along accomplishing nothing with their millions in cash! The company did make the following statement when financials were filed in October:
"Going forward, the Company plans to evaluate advanced stage projects and other investment opportunities that the current resource market for junior mining companies may present. The Company will also look at suitable joint venture opportunities for its Yukon properties."
If you like this style of cash rich speculation, RYG might be an interesting one to look at as the discount to cash is significant at 30% - note however that you are treating this like a cash rich shell looking for a new deal to rebuild shareholder value. The timing of this can be very unpredictable so these require patience.
There are many very good resource projects floating around that are in desperate need of money but it requires a careful marriage of management, resources, and cash. If RYG could identify a strong project in desperate need of cash, there could be strong upside potential from this trading range - without assuming an abnormal amount of risk in the process.
Primary Concern: Complacent Management
Hopefully the December CEO news was the first sign this will change. Or so I am hoping.
Definition of Complacency: a feeling of quiet pleasure or security, often while unaware of some potential danger, defect, or the like; self-satisfaction or smug satisfactionwith an existing situation, condition, etc.
CONCLUSION
I am ONLY interested in a change of business or a high quality merger or takeover. Some of these companies with cash have moved into the business of “investing” in various public companies or projects. The market hates these deals and the stocks become dead money - typically trading well below cash / investment value.
This speculation is entirely dependent upon management’s “degree” of complacency. If they want to stay on easy street, they simply manage some investments and draw large salaries and director fees. If they truly care about their investors and want to rebuild shareholder value, then they will go the acquisition / merger route.
Ryan Gold is a tough call because I have seen similar companies with big bank accounts just sit around and draw salaries and director fees. The same thing may continue to happen here.
Their $21 million cash is very valuable in this market and it is worth 18 cents per share ! We just need someone smart enough to leverage it properly.
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Disclosure: Danny Deadlock owns 150,000 shares of Ryan Gold purchased in 2014
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