OK... well enuf of this speculation.
Recently I was in Vancouver on vacation and noticed the stock exchange was right next door to the motel. I decided to check it out. If you are ever there, dont bother. There is no "exchange floor"... its all computerized.
To my surprise, I noticed that Colossal's office was in the same building. I decided to stop in. I spoke with the secretary, who said "One moment". I was then greeted by Dil himself! I was very impressed with how he treated me and how straightforward and open he was about answering all my questions. He asked if I was going to be in town a couple days. I said yes. He asked me back in two days for a presentation.
When I came back, he had prepared a one hour slide show and he and a mining engineer were present to answer my questions. Let me sum up.
Most of this is common knowledge, but you all dont seem to be aware of it, so I will get you up to speed on the past and then talk about the future.
About the same time that Colossal moved from the canadian exchange, they completed a financing agreement that involved some convertible stock. Supposedly, the other party was going to wait and not convert all the stock and dump it on the market. They did not. This coupled with the canadian brokers dumping most of their shares (which they often do in such cases) caused the current decline. Dil indicated to me that about 300-400K of the 3M shres of the convertible were still out. I figure it will be 6-8 weeks before it is all gone. Then the overhead pressure on the stock price will be gone. There was not to my knowledge any shady insider trading or a reason to be concerned about a lawsuit or investigation. That is past to present.
Now for the company update. They currently have the furnaces shut down. They are reconfiguring them to produce more product. As the engineer explained to me "It's like going from making pasta for 2 to making pasta for 20". Anyway, that should be done in 6-8 weeks also.
Colossal has also obtained a refinery to further enhace their ore. Right now, they are selling unrefined "pellets". They want to take the process to the next level, to enchance profits. The refinery will need reworking and I believe they are looking for a partner to help in this. The goal for the refinery will be to process more than just Colossal's ore, so there is some incentive for the prospective partner.
I liked the plan, but the company obviously is not presently at the stage of producing a profit. When they start selling ore again in about 2 months, the price should go up.... ALOT! They need to follow through now though. What we need here is cash flow.
Overall, the trip and personal attention I recieved convinced me to hold. I believe the long term plan of the company is going to make this a good investment. Perhaps I can maintain an open communication line to Dil. If I get any more info, I will keep everyone informed.
Steve |
