I had a good discussion with Cam after the private placement announcement. The money that he and David put in was classed as a debt settlement, and could not be classed as part of the private placement. 275K was put up, and 115K is left to work with. This will allow money to pay the auditors, transfer agents, and get the office running again. It also gives the $40,000 down payment on a rig for doing the drilling. The drilling has been approved by the Saskatchewan Government. The expensive part is the actual drilling, and the funding for that will be raised by means of flow through shares. The flow through shares have also been approved by the various levels of government.
For those not familiar with Canadian tax laws, flow through shares allow a person to purchase a share in a company, and get a 100% tax write off for the share. If you are in the 54% tax bracket, which is what a lot of people pay on their last few thousand dollars they earn especially in B. C. where we are over-taxed, then by putting up $1.00 you get 54 cents back from the government in saved taxes. Suppose the flow through shares sell for .40, that means after tax the person is really only paying about .18 for them. The risk becomes a lot smaller, and hence it is easier to raise money in this manner, especially when there are already proven reserves in some of those holes.
Already some of the Kimberlite pipes have been proven to be economically viable. Since only 20% of the tracers were coming back, does that mean that there is 5 times more value down those holes? If so, then this is a very good property. It is also only a few miles from a major town. The cost of developing this would be a fraction of those properties such as BHP Minerals in the NWT.
A final thing to consider, and a lot of people missed the point of the 2 additional directors appointed to the board. These people are both experienced at raising money in this Industry. The one has worked with Aber Resources, who has the good property in the NWT. I believe their backgrounds are accounting, and legal.
The flow through shares are already in the works. There is a possibility depending on how the financing comes in that they might also put some money into the Clearwater site.
I think that this one has lot's of opportunity, and raising cash in the flow through manner I am sure will give new life to KRT.
This is my opinion anyway,
Thanks,
Mike G, p.s. this is my 1st day being able to post, and am glad to be in this forum. |
