One for 777 and the Kid - - Digging though my McEwen Archive I found this which I had long forgotten about.
Oh to be back on SI and free of "Yahoo's Limitations" (4000 Characters, No pictures, No boldface, Not a single luxury, like Robinson Crusoe Yahoo is primitive as can be) is like breaking the chains of confinement and being Free once again..
Perhaps the Interviewers opening words (in Bold) stuck in the ole Gray Matter, because I created my own McEwen Archive beginning in 2007 to better understand The Man.
This also dove-tails with the board opening and the first 3 posts, about how UXG came / is put together.
Hope some enjoy these gems I throw out now an then. I know the Kid eats them up like popcorn.
JW
Interview with Robert McEwen-U.S. Gold Corporation 
February, 2006
ANDREW RACZ: When we analyzed on Wall Street some of the conglomerates in the past who made various steps and takeovers, sell-offs, a friend of mine, a money manager, said the only way to analyze this company is if you get into the mind and the brain of the chief executive, who was heading those companies. This is the case with U.S. Gold. Unless somebody can understand you, they cannot analyze the company. Is that correct?
A: To a degree, yes.
Rob McEwen Becomes U.S. Gold's Largest Shareholder
Denver, Colorado, July 29, 2005 -- U.S. Gold Corporation(OTC BB:USGL) is pleased to announce that Rob McEwen has purchased by way of private placement with the company, 11.1 million shares for $4,000,000, becoming the company's largest shareholder with 33.3% interest. It is planned that Mr. McEwen will be assuming the role of Chairman and CEO shortly following the planned resignation of current management. Over the past twelve years, Mr. McEwen turned Goldcorp Inc. (NYSE:GG; TSC:G) from an investment company with a market capitalization of $50 million into a mining company with a market value of $5.4 billion today.
Q: First let's go to the beginning. What was your concept of setting up U.S. Gold?
A: To create the premier exploration company in Nevada. In essence, having an exploration company with a land holding equal to that of a major and an exploration program equal to that of a major gold mine, with a market liquidity of an intermediate and the up side of a junior exploration company. I am talking about Barrick, Placer Dome (Table 1 - Capitalization).
Q: So we go to Nevada and you are competing with the Hungarians.
A: All right.
Q: How much is the capitalization of Barrick?
A: Probably around $20 billion now.
Q: And your capitalization?
A: We just completed an issue, raising $75M Canadian, or will be shortly.
It'll be about $200-250 million.
Q: So in other words, $20 billion versus $200 million.
A: Yes.
Q: And you are saying that if you have as much territory in Nevada next to Mr. Monk's company (Barrick Gold), you have a fighting chance. And if the chance works, the numbers can be impressive.
A: Yes. They would own more property than we do today, but we'd have a very large land position in Nevada in a very prospective area.
Q: Why didn't anybody buy this out before you?
A: There are a couple of reasons. The property itself had been tied up through a series of joint venture partners for about the last ten years, and it only came out of a joint venture in the spring of last year. Then it was quickly entered into a proposed three-way merger. That parties proposing the merger were underfunded and that presented the opportunity to me, and I went in and offered the company capital that wasn't available to the proposers of the three-way merger.
Q: Altogether, I added up that you spent approximately $25-30 million in getting involved with six companies.
Rob McEwen to purchase up to 1,250,000 shares in Coral Gables Resources, Ltd., becomes a Director and Executive Chairman of the Board
Coral Gables Resources Ltd. has arranged a non-brokered private placement of up to 1,500,000 common shares at a price of $3.00 per share. The place for up to 1,250,000 shares is Mr. Robert McEwen and upon closing he will hold just under 20% of the outstanding shares. The net proceeds of the offerings will be used for additional exploration and development work on the company's mining properties and for general working capital requirements.
Robert McEwen joins Tone Resources,
Take Over Subscribes Private Placement
As previously announced on November 30, 2005, Tone Resources Limited is arranging a private placement of 3,000,000 units. The company is pleased to announce Robert McEwen has agreed to subscribe for 2,500,000 of the units. In addition, the company is also pleased to announce the private placement has been increased to 3,300,000 units to accommodate pre-existing financing rights held by Teck Cominco. The private placement is subject to regulatory approval.
Rob McEwen to invest $1.5 million in Everton Resources to accelerate its exploration program
Everton Resources Inc. is pleased to announce that, subject to regulatory approval, it has entered into an agreement with Mr. Robert McEwen of Toronto, Ontario to issue 3,000,000 units at a price of $0.50 per unit for aggregate proceeds of $1,500,000. Each unit will consist of one common share and one common share purchase warrant. Each whole share purchase warrant can be exercised into one common share at a price of $0.70 per share for a term of 18 months. The net proceeds of this offering will be used to finance exploration work at Everton's Opinaca and Wild Cat gold projects in the James Bay region of Quebec and also Everton's gold and copper portfolio of properties in the Dominican Republic.
Acquisition of Shares of Lexam Explorations, Inc.
Toronto, Ont., September 1, 2005 -- In accordance with regulatory requirements, Evanachan Limited, a company wholly-owned by Robert McEwen, announces that he has acquired 18,990,641 common shares of Lexam Explorations Inc. from Goldcorp and one of its subsidiaries for aggregate consideration of $399,999. These securities represent approximately 49.8% of the issued and outstanding Lexam common shares. Mr. McEwen is the Chairman and CEO of Lexam and is the Chairman of Goldcorp. Evanachan and Mr. McEwen now hold an aggregate of 19,101,752 common shares of Lexam, which represents a 50.1% interest in Lexam, on an undiluted basis.
Rob McEwen Acquires 18.2% Stake in Nevada Pacific Gold
Nevada Pacific Gold Ltd. is pleased to announce that, subject to regulatory approval, it has entered into an agreement with Mr. Robert McEwen of Toronto, Ontario, to issue 12,5000,000 units at a price of $0.40 per unit for aggregate proceeds of $5.0 million. Each unit is comprised of one common share and one common share purchase warrant, each warrant exercisable to acquire one common share of the company at an exercise price of $0.50 per share for a term of two years.
As a result of the private placement, Mr. McEwen will hold 18.2% of the outstanding shares of the company and, in the event of exercise of all of the warrants, Mr. McEwen will hold 30.8% of the outstanding common shares of the company. In accordance with rules of TSX Venture Exchange, as this constitutes a "change of control", the placement will close in two tranches, the first being for 6,921,213 units and the second tranche for the balance of the units will be conditional upon receiving shareholder approval. The company has called an extraordinary general meeting of shareholders to be held January 23, 2006 for the purpose of approving the second tranche of the private placement.
Robert McEwen Purchases Shares in White Knight Resources Ltd.
Toronto, Ont., July 5, 2005 -- Robert McEwen announced that he has purchased today an additional 2,270,700 common shares of White Knight Resources Ltd. in the market. The purchase price was averaged at $0.91 per share. Mr. McEwen now owns 7,952,427 shares of 14.7% of the outstanding common shares of White Knight. These shares were purchased for investment purposes.
Robert McEwen Purchases Shares in Guyana Goldfields, Inc.
Toronto, Ont., July 5, 2005 -- Robert McEwen announced that he has purchased on June 29, 2005, 650,000 common shares of Guyana Goldfields Inc. in the market. The purchase price was averaged at $2.55 per share. Mr. McEwen now owns 4,555,811, or 11.6%, of the outstanding common shares of Guyana Goldfields, Inc. These shares were purchased for investment purposes.
Robert McEwen agrees to invest a total of $10 million in Minera Andes
Spokane, WA - December 21, 2005 -- Minera Andes is pleased to announce that Robert McEwen has today subscribed $5,395,159 Canadian for an aggregate of 15,414,740 units issued by way of private placement. Excluding warrants, completion of this subscription makes Mr. McEwen our largest shareholder with a 14.2% interest. Terms of a second private placement have also been agreed to with Mr. McEwen that would make his total investment $10M Canadian. The second private placement of 13,156,689 units will only close 61 days after receipt of approval from the shareholders of the corporation for the placement and for the waiver or repeal of Minera Andes' shareholder rights plan as it applies to Mr. McEwen. Excluding warrants, completion of the second placement would give Mr. McEwen a 23.5% shareholding in Minera Andes.
Proceeds from these two private placements will be used for further development and exploration of the advanced-stage, high-grade San Jose gold/silver project in southern Argentina. A positive bankable feasibility stud for the project was released October 24, 2005 and permitting, advanced engineering and other work is currently underway. At San Jose, a work force of 330 is developing the underground workings exploring the main gold/silver vein. Proceeds will also be used for general corporate purposes and for exploration at the Los Azules copper discovery in west central Argentina, in accordance with Minera Andes' recently announced letter of intent with Xstrata Copper Americas.
Original investments (see above)
Compounding value of warrants
$30M
$15M
$45M
Current market value (combined)
$100M, approx.
Total market value of above companies
$500M, approx.
Fully diluted market cap of USGL - 50M shares
$250M
Less $75M
$175M
50M shares of USGL ($5) -- controls
$ 75M cash
$500M marketable securities
A: Right.
Q: Corale, White Knight.
A: United Pacific.
Q: Then the big one.
A: Then there was one in Argentina, Andes.
Q: In other words, you spent let's say $30 million. The warrant would make it another $40-50 million. Market value has gone up. So let's say the investment is worth $100 million, which is 50% of your total capitalization of U.S. Gold.
A: Right.
Q: The other fact is, however, if we expand the total capitalization of these companies, it's not $100 million but probably well over $500 million. Correct?
A: If you combine all the companies?
Q: You invest $30 million. The warrants would be another $45 million. That's $75 million. But the total capitalization of these six companies in today's prices -- the total, not what you own but the total -- is probably over $500 million.
A: It's approaching that, yes. Or over that.
Q: In other words, your $200 million market cap of which $75 million is cash, the $125 controls $500 million marketable gold securities and all the potential gold production or reserves, what you will find. To go a little bit further, the price of gold is higher than a year ago. If they all drill and the reserves are established, the value could go from $500 million to one billion dollars.
A: It's possible, yes.
Q: That's an issue of 5 to 1, compared to the $200 million market cap.
A: Yes.
Q: These are all facts, okay?
A: The warrants that you mentioned are all in the money. The total investment would be about $45 million.
Q: With the warrants?
A: With the warrants.
Q: All right. But you can say that the value at the moment is $100 million.
A: Yes, you could say that.
Q: And the total is still $500 million.
A: Yes.
Q: And the potential with gold can bring it up to one billion.
A: Yes.
Q: At the moment, this is on the map. Very soon you will have $75 million U.S. It will be in your company when?
A: The 22nd of February. Next week.
U.S. Gold Corporation announces increase in proposed offering to U.S. $75.15 million by over-allotment
U.S. Gold Corporation is pleased to announce that its previously announced private placement of U.S. $50.4 million has been increased by reason of an over-allotment to 16,700,000 subscription receipts for aggregate proceeds of up to U.S. $75.15 million. The subscription receipts will be sold at a price of U.S. $4.50.
The remaining terms of the proposed offering remain unchanged. Each subscription receipt will be automatically converted into one unit, subject to adjustment and dilution penalties in certain instances, upon the satisfaction of certain stated conditions. Each unit shall be comprised of one share of the company's common stock and one-half of one common share purchase warrant. Each whole warrant will entitle the holder thereof to purchase one common share for a period of 5 years following the closing of the offering at a price of U.S. $10.00. The escrow conditions include, among other items, the filing of a resale registration statement in the United States and (final) prospectus in Canada qualifying the securities underlying the units and the listing of the common shares on the Toronto Stock Exchange.
The net proceeds from the offering will be used for the exploration and development of the Tonkin Springs gold project in Nevada and for general corporate and working capital purposes.
Q: So in other words, when you walk into the office on the 23rd of February, you can write a check for $50 million to anybody.
A: Well, 50% of the money is escrowed until we achieve certain goals. We have to get the stock registered with the SEC and we have to get listed on the Toronto Stock Exchange. Other than that, yes. That might take four months.
Q: For the escrowed money? So half of the money is available in late February.
A: Yes.
Q: It is free and clear.
A: That's correct.
Q: This game now converts into a chess game. Because you can issue new shares to expand a totally new company. You can use the cash and notes or stock again to buy another gold company other than the nine which are on the map. If U.S. Gold happens to go up from $5 to $8, you can make some exchange offer with any of these six and bring it into the corporate umbrella.
A: Yes.
Q: If you are as lucky as the Hungarians, you will bring into the fold the one which is making the greater progress (referring to Peter Monk, chairman of Barrick Gold, the largest gold company in North America. He is of Hungarian birth.)
A: Yes.
Q: So that would create a higher market value at the parent level, and you still have those nine companies which you tied up and additional companies which you might buy. And each of the gold production or established reserves accrue to the parent company.
A: Yes.
Q: What is your policy?
A: With respect to?
Q: I described my own theories. Do you have an established policy of how to go from here?
A: When I made the investments in all of the companies, I said what I wanted to create was a larger exploration company that would become the premier exploration company in Nevada. In order to do that, you would take these various companies and roll them together, consolidate them into one entity. That new entity would have a large land package, a large treasury, offer better market liquidity, but still retain the up side of being a junior that would come if you had a discovery. It's located strategically in a very prolific area for gold, right next door to a major discovery. Everybody who had worked U.S. Gold's property in the past had been looking for shallow deposits. The target we're looking for is deep deposits like the discovery next door. The discovery next door added about $4 billion to the value of Placer over a period of six months, while this discovery was unfolding. So clearly we're looking to see if we can find a similar setting, a similar type of deposit on our property.
POLICY & CONCEPT
Robert McEwen:
I want USGL, the largest gold exploration company in Nevada. The new entity, a large treasury, offers market liquidity, large land package.
However, by remaining a junior in market capitalization -- when it comes to discovery -- the upside potential is meaningful.
Q: Now you are talking of very big numbers.
A: Yes.
Q: Do any of these companies drilling deep in Nevada create a huge value, increases the value of U.S. Gold? You can then fold these companies perhaps at a very advantageous price because the price of the parent has gone up.
A: We will use U.S. gold as a consolidation vehicle, yes.
Q: A major discovery would help because your own stock goes up very sharply, and one thing is to issue a stock at $5 or $10 or $15. Talking of billions, then of course it's a different ball game. You concentrated on smaller companies because they had no money, they couldn't do deep drilling, and they didn't have the management capability to do things on their own.
A: There was excitement in the area where these companies. . . and in their stocks in 2003 when the discovery was made by Placer Dome next door. That was the property that Barrick bought when it bought Placer. In 2004, the gold market stalled or the gold price stopped moving higher, and all the gold shares rolled over and went lower. By the summer of 2005, no one was paying attention to gold, no one was paying attention to these junior companies. But the majors in the area had continued their buying and had entered into joint ventures with a number of juniors, and the juniors were only too eager to go into these joint ventures because their treasuries were shrinking and they weren't sure they were going to be able to raise any capital in the near term.
So while the market and the juniors were only too quick to sell off their properties or their shares, the seniors were expanding their land position at either end of the trend, and in the middle through joint ventures with the juniors. And that's what attracted me, that this is the back yard of the two largest gold companies in the world. They have all sorts of physical plants and they have excess capacity, and they're starting to believe that what they saw in the Carlin trend, which is where they had their big operations could be repeating itself in this Cortez trend.
Q: You have been quoted a few times about a major increase in the price of gold. Can you comment on that?
A: The gold price in my mind is in an uptrend. It's moving in three steps. The first step has already been completed, and that ran from 1999 to the end of 2004 when the gold price went from $250 to $440. And that was largely moving relative to the dollar. And much of the world really wasn't excited about gold because it wasn't going up in their currencies. So in that period, gold was up 58% in dollar terms but up about 11% in Euro terms over a five-year period. That changed in 2005 when the European constitution was rejected by France and the Netherlands. And the Euro, suddenly there was some doubt around it and the currency markets all started reacting. There was a very positive move in gold in all currency terms, all major currencies.
So now we've moved and the second step is really the world audience looking at gold and saying it's moving. We don't have a big position or we have no position in gold. It's moving and we should get on board. That I expect to run from 2005 to 2008, and by the end of that period it will have tested its all-time high of $850 per ounce.
The third step is where you have a significant move in the gold price above $850 an ounce, and that will be in a period between 2009 and 2010, where you could see significantly higher prices. That would be the phase that all markets one time or another go through, where you have an exponential run and slope on the price. So where could it go if you were to look at the 1980 high of $850 and adjusted for inflation? So you get today a price of around $2,200 an ounce.
Gold -- according to Robert McEwen
$250 - $440
Moving with the dollar
1999 - 2004
$850
Death of the Euro, gold in multi-currency move
2005 - 2008
$2,200
Gold is monetary reality in the 21st century
2009 - 2010
Q: I have an observation, if I may. Assuming I really don't know how money is created internationally, all I can say is that there's a commodity boom, a real estate boom and the population boom in the Far East. For instance, the other day I read that a Russian oil company, Rostovsky, is trying to raise $20 billion in London. The stock exchange is going public. That kind of money has never been in investors' hands. These are big numbers, because every day there is a similar one.
That means two things, that if there is money floating around, the currency fluctuations will be bigger, and that's always very bullish for gold. What is interesting is that the silver, very small volume, with this EFT's like gold, could go to $20 or $30. In other words, the whole value system is going to change. The only thing which is going to be still cheap is hamburgers at McDonald's.
A: Yes.
Q: Look, this is the 21st century. This is a money explosion and value explosion. A hundred years ago, in the 1920's and 1930's, there were dictators. It's still a better period to live in than when my parents lived.
A: That's right.
Q: That's my vision of the future. Do I see it clearly?
A: I agree. The gold supply can only increase about one percent a year, and everything else is increasing by many multiples of that.
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