Harry, your theory could be right, and I for one, do not believe the shorts theory either. As for the "break-up value of the company, I do not see how one can even measure this without seeing an updated balance sheet. The exploration costs (all deficits till now?) cannot be capitalized unless you can put a value on their properties. The deal with the Oro Grande was an attempt, among other things, to bring an "asset" on the book since there was in the past some "accepted" valuation on this property. However, Hassayampa and Weaver Creek have had no COC type of assaying and thus the SEC cannot accept any "book value" for these. Furthermore, we really do not know what is the value of the "used equipment" on site if they cannot extract the goodies profitably and thus are forced to fold. Without a balance sheet, we cannot find out if they have any debt holders that might have priority, in the event that they have to fold, thus saying that $5 MM is a break up value is not very accurate. As an ongoing concern extracting goodies at a profit, that is another story, but that is exactly the crucial question before us, which right now, the market says, naught.
Zeev |
