International Precious Metals (IPMCF) Message Board

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Gold/Mining/Energy : International Precious Metals (IPMCF)

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To: Paunch who wrote (34118)	9/10/1998 9:19:00 PM
From: Larry Brubaker	of 35569

<<Have you noticed on this thread how all of the posters that have shares of IPM are trying to find a way to save their investment and all of the posters that own no shares are saying let it go it is worthless.>> On the contrary. I'm suggesting if you believe there is value to the Black Rock property, you will spend less money to realize a greater portion of the value by buying the rights to the property directly from Phoenix/Omega, rather than by resurrecting IPM. If you resurrect IPM, you have to carry the existing 25 million shares, AND IPM's debts with you. You would not have full ownership to the rights of the property because the owners of the existing 25 million shares would have equal rights. Consider the following scenarios for raising $2 million. IPM issues 10 million new shares at 20 cents per share to raise $2 million. Under this scenario, the new investors putting up the $2 million would only own 28% of the company. Existing shareholders (whether they participate in the financing or not) would own 72%. IPM issues 25 million new shares at 8 cents per share to raise $2 million. The new investors would own ~50% of IPM. Existing investors would still own 50% of the company. IPM issues 200 million new shares at .01 to raise $2 million. The new investors would own 88% of IPM. Existing shareholders would still own 12%. While the new investors would now own a substantial majority of the company, your existing shares become almost worthless because they represent such a small proportion of the company. So, in order to retain a value to your existing shares, you gain less control over the ownership of the company. In order to gain control over the ownership of the company, you have to realize your existing shares are worthless. Alternatively, you could offer to buyout all of the existing shares for say, 5 cents per share. But that would cost you $1.25 million to acquire full control over the property. You would still need to pay off IPM's debts, and spend money to explore the property. It would seem to be much cheaper to allow IPM to go bankrupt and negotiate with Phoenix/Omega to acquire rights to the property. Comprende?

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