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James,
Before I answer your question please allow me to provide you with a little background on Caledonian's history in Vancouver. After Caledonian was listed on the VSE it completed a private placement, followed by a public offering in February 1997. The private placement (1 million shares) was completed at C$0.22 and the public offering at C$0.25 (6.5 million shares)to raise a combined total of close to C$2 million. Whalen Beliveau was the lead broker and sponsor for the financing and listing. In fact, I was the broker at Whalen who led the financing - to this day many of my former clients still own shares, and a most of the brokers we syndicated to still have shares in their books. After the financing CDM traded up to a high of C$0.45 on good volume.
The stock went up in the extremely hot pre Bre-X market. Also the Company, with some help from us, met with a lot of brokers and investors. A significant client of mine also played an important role in the introduction of investors who ended up owning shares in Caledonian. I would prefer not to name him here as he is no longer involved with Caledonian; also he was a client of mine at that time and accordingly some level of confidentiality is expected. In summary, he was a tremendous supporter of Caledonian at one time, but moved on to other projects after the market collapsed post Bre-X.
Whalen has been a big buyer and seller of Caledonian; which is understandable as they were lead broker. I still have strong ties to Whalen, (I am a client now), and there are a few Whalen brokers who still support Caledonian. However, in a tough market retail investors will sell for a variety of reasons: lost hope and patience, need of the capital for expenses or a stock that is "moving", lack of current knowledge about the Company (this could be partly Caledonian's fault for not spending enough time on investor relations, or the broker not keeping up on the Company), or maybe they just do not want to be involved in exploration now.
Notwithstanding the above, I would agree that the stock is oversold at current prices, particularly if Caledonian receives the A$10,900,000 it is expecting from Base Metals. Caledonian's management has acquired a unique land package on New Caledonian and has proven that it will not give up no matter how tough the market gets. While the shares are below the price we financed them at, I am very pleased that we had the opportunity to get involved because I believe that the management team is motivated, capable and wants to give all the shareholders a the best value for their dollar. In addition, Caledonian's management team has learned a lot about North American markets and is improving its promotion and investor relations capabilities to match its abilities in prospecting and financing in the Australian way.
I hope you do well with your investment in CDM!
Best Regards,
Kim Oishi |
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