You must realize that they owe money to several people and companies. They have use up their credit with investors and investment firms. They likely cannot get operating capital without putting in some money. The question is where did the money come from (URT investors?), as they, in the recent past, had a company go bad on them?
How much have original investors been diluted in their stock (over 100%)? Has Ms. Perfect and Mr. Muir's shares been diluted the same. NO, in fact with their preferred shares and their ability to give themselves stock, it may be possible their dilution could end up zero. Who has made the mistakes and who is paying for them? Does this sound like they care about the investors?
What are their preferred shares convertible at? I am of the understanding that as they have given themselves preferred shares (Can they do so endlessly?) convertible to common stock at 5 to one (one preferred is worth 5 common). You might ask them how many they have given themselves and at what types of conversions. It all adds up to even if the stock goes up, the dilution has been and will continue to be tremendous.
Also note that they will have to sell large quantities of shares at this price to operate, even if they get the ball mill running, which by the way, according to my information, has not been purchased or started to be installed, at this time.
Unless they have made a $150,000 payment for the ball mill on the 20th of June they are in default and can lose the whole mine. Did they forget to put that bit of information on their website? I called down to my contact in Cosala and he said the owner had not received the payment as of the 22nd. I would assume they will make the payment, as it is a very small amount and they have sold a lot of shares recently.
As for the shares Ms. Perfect and Mr. Muir have acquired, if I saw them selling their personal shares on the market and loaning that money to the company, then I would have some confidence. Did they say if they drew that money out in a wage or where it went? Everyone needs to get a clear picture of what they are actually doing, and up to this point they have not given anyone I know anything but dancing lessions.
Mr. Rocz, their newest director, has no practical mine experience, and is a gun for hire. Is he going to help them find silver? Where is he located? What can he contribute? They have a board loaded with financial people. Do they use them? How about the board member who is a mine owner in Africa. The last I could verify, they had not tapped him in any useful capacity, other than as a name to give their company credibility. This seems to go for other board members also.
Is this a financially sound company?
Jim |
