I have a decent sized position in SNS and am interested in the property and the NLW and PP participants some of whom I gather are quite well know. Rumor Sprott tried to buy "large" into the PP but were too late. Several NLW mentioned here may have participated.
But here is what a basher says and what he says may make sense so on many stocks incl. SNS buyer beware:
<<<The Crescent mine was not stolen out from under anybody's nose. Both Sterling and Bunker Hill, each of whom is intimately familiar with the Crescent and could have easily acquired it had they wanted to, decided to pass on this one. They have no regrets.
There was only one bid for the property at tax auction. It was apparently also the only bid. But not because other prospective buyers were asleep at the wheel.
I personally looked at purchasing the mine for the land position alone -- with no immediate intention to rehabilitate the mine. But after talking to a number of people, it became clear that I would probably be outbid at auction by some company (most likely a Canadian junior listed in Vancouver) who saw greater value in aggressively promoting the property. I was later surprised to find out that in fact only one company (SNS) apparently placed a bid at the auction.
This auction was well publicized in the trade. I personally spoke to several up-and-coming silver companies about the Crescent mine. I even handed out a number of copies of the auction material at the SF Gold Show in early December.
I can assure you that a $650,000 purchase price is not the type of deal that necessitates a protracted period of due diligence. The 20 days provided by the county was plenty. Besides, how much due diligence is required for a flooded hole in the ground with no mining or discharge permits, no hoist, no mill, no tailings pond, no resolution to historic environmental liabilities, etc.?
One last idea that I considered was to flip the property if I could acquire it for under $1 million at auction. The down payment was only 5% but the auction requirement to be financially prequalified would have been a little tricky. I don't know how badly Strategic wanted the property but I'm glad I didn't find out.
In retrospect, Strategic has now succeeded in parlaying $650,000 into US$35 million in market cap taking into account the private placements. They have turned a dead horse into a Triple Crown contender.
In my personal opinion, the Crescent mine is probably worth more than $650,000 and I congratulate Strategic for taking a chance with it. But is this mine really worth 50 times its auction price from just over a month ago? I think not. Still, Strategic has done a textbook job of promotion and if they can pull another rabbit out of the hat, this story could be one for the history books. At the same time, the chance of this mine ever being put back into production is very slim.
Finally, who says Brian White is the greatest geologist in the Silver Valley? No disrespect to him, but up country ("Wallace zone") silver is still just a theory, one that Sterling has been unable to prove in the past 3 years of exploration. The fact is that very little historic silver production in the Silver Valley has come from the Wallace zone. And there is probably a very good reason for that: there is unlikely to be a lot of silver there!
At the Sunshine, if they do find any silver at the higher elevations, it is bound to be lower grade and narrower veins than those found at greater depth. Yet the hope is that these inferior grade deposits can still be profitably mined with bulk mining methods using LHD equipment.
At the end of the day, Brian White is "just" a geologist, perhaps even a very good one. But he "just" has a theory. And I suppose "just" $35 million of newly-minted investment capital is riding on his theory. If the theory doesn't work out, "just" the geologist will get the blame. No pressure, Mr. White, hope you realized what you were signing up for!
In summary, Strategic management has conducted a brilliant strategy so far in terms of the business. But this is not necessarily a brilliant strategy in terms of shareholders. Please use your noodle on this one. If you need help, go to my website..>>>
stockhouse.ca
Insiders like it. <G>
canadianinsider.com
Jan 04/07 Dec 28/06 Linder, Neil Robin 10 - Acquisition in the public market Common Shares 20,500 $0.750
Jan 04/07 Dec 22/06 Linder, Neil Robin 10 - Acquisition in the public market Common Shares 7,500 $0.790
Jan 04/07 Dec 22/06 Linder, Neil Robin 10 - Acquisition in the public market Common Shares 3,000 $0.770
Jan 04/07 Dec 22/06 Linder, Neil Robin 10 - Acquisition in the public market Common Shares 4,500 $0.750
Dec 20/06 Dec 19/06 Linder, Neil Robin 10 - Acquisition in the public market Common Shares 3,000 $0.720
Dec 20/06 Dec 19/06 Linder, Neil Robin 10 - Acquisition in the public market Common Shares 3,000 $0.700
Dec 20/06 Dec 18/06 Linder, Neil Robin 10 - Acquisition in the public market Common Shares 10,000 $0.750
Dec 20/06 Dec 18/06 Linder, Neil Robin 10 - Acquisition in the public market Common Shares 37,500 $0.720
Dec 18/06 Dec 15/06 Linder, Neil Robin 10 - Acquisition in the public market Common Shares 16,000 $0.700
Dec 18/06 Dec 13/06 Linder, Neil Robin 10 - Acquisition in the public market Common Shares 5,000 $0.580 |
