To All:
I spoke with Mark Cramb at some length today to explore some
ideas to see if any chance to salvage the Angolan deal and
following is the gist :
-1- Asked how many shareholders of record there of STS and
heard about 1000, evenly divided between Canadians and U.S.
investors
-2- Harry Bristman, Chairman, had considered to float another
placement with shareholders but dropped the idea because they
can only do so in their own jurisdiction (VSE's), also it would
take some 60 days to put the pieces together
-3- Mark was pessimistic about raising the $3.5 million needed
within what he described as a very narrow window timewise
(days). I asked why this is so since remaining funds have to be
transferred to Angolans in June, and he replied that it's probably too late now for alternate financing, it could have been done earlier
in hindsight.
-4- I asked about possibility of another negotiated extension
with Angolans and he replied they have a South African counterpart
exploring this very issue in Angola.
-5- I urged them to explore any option, even bridge financing
(maybe the Angolan side would agree to an extension if there was
some money in hand). Mark said they have been exploring bridge
financing but he expects no longer enough time.
-6- I suggested in view of STS's heretofore loyal and enthusiastic
following, why not find a way to raise a small amount each
from existing shareholders to tide them over? He suggested
I call again tomorrow. He also suggested I discuss any idea with
Harry Bristman.
In any event my idea is very simple. There are 1000 investors.
If each puts up $1000, that's a total of $1 million. That should
lend credibility to potential larger investors or lenders.
My own view is: OK I played a couple of hands at the blackjack
table and they were lousy hands. I am willing to play another
hand with a modest no. of chips with the possibility of getting
a better cards if that would keep the dealer in the game.
However if it is done presumably it must be done quickly and would obviously have to be acceptable to the VSE, and not be consummated until there is clear assurance that the other pieces would fall into place. A mechanism would be needed.
My other view is that Bristman et. al. have a fiduciary duty to his shareholders. I originally bought the stock because of their
proposed activity in Uganda. ( Mark, by the way, said that they
might go back to this concept, that they still have contacts and
could obtain fresh properties there at a fraction of the cost
of Yetwene.). Nonetheless, Yetwene has been the main pitch
to investors and may in fact have better short-term rewards.
With the Angolan project's looming history and Bre-X I must confess my skepticism about prospects for such an Ugandan about-face.
But STS management has a responsibility to try their utmost with some creative ideas. Mark said it is too late at this late date to
sell Yetwene. I don't know if there is time or whether VSE
would allow it, but how about something like convertible debentures denominated in $1000 or even $500 units with an attractive conversion formula? Or some other idea if a more creative or relevant one is needed. Or maybe simply issue common stock upon pledges from
shareholders.
Well, all you high rollers out there, willing to play another hand
if the game is still on? I will talk with them again tomorrow
and try to find out the detailed facts and options, why so little time? What is the Angolan bottom line ? What room is there
for maneuver under VSE regs? What other instruments could be considered? etc. If the small investor approach is feasible it obviously would need support from most if not all existing shareholders.
If Yetwene could be saved with a package workable to my satisfaction
I am willing to put up a grand or such (after all its Canadian dollars!)
But that's only my 2 cents. Any comments?
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