Steve: They are not writing the Manitoba property off. Just taking a bit longer to evaluate it. I wasn't too impressed with the news announcement myself. I think it was one of the more negative announcements I have ever read.
Here is what appeared in today's Insider Report (which is where I first heard about the stock)
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Solidor Resources [SLZ.V]
When Solidor was first featured by the Group more than a month ago, it was solely based on two things: Their Manitoba property which is completely surrounded by TVX and their new management. The Insider Group was betting on Solidor selling or jv'ing their Manitoba property and purchasing a Mexican property to take the stock to the $1+ level.
Unfortunately, there has been a stumbling block. The management, which we had and still do have confidence in has decided that they need to reorganize the company completely before they will be able to move ahead. This is good in the long term but bad for current shareholders in the very short term.
There was a selloff in the stock today, closing down $0.03 to $0.16, based on their news release after the market closed Friday. The release notes that Solidor wishes to change its name and consolidate its shares from 20,000,000 shares, of which 8,209,711 shares are issued and outstanding into 4,000,000 shares, of which 1,641,942 shares will be issued and outstanding (ie, consolidation on a five for one share basis).
The release also notes that Solidor has received one unsatisfactory offer for its Manitoba property. IR at the company said that they received an offer well below the worth of the property because TVX likely believes that Solidor was not in a financial position to prove up the reserves on the property.
The share consolidation and other changes should change all that... and this is where it will be good in the longer term (2-4 months). The company felt that it was not in a good position to do financing and that it would hurt shareholder value to finance at low levels on a stock with a relatively large amount of shares outstanding. Once the changes have taken effect we have been told that Solidor will likely be cashed up by Insiders ($2 million) and will begin to acquire the properties which they had spoken of earlier.
Despite the market sell-off today and the negative tone of the news release we have found that many market players who own Solidor are viewing this is a good and necessary change for the stock, and while it means a delay before we can see movement in the stock, it will be advantageous for those who can hold for another 3 months.
What has transpired confirms our belief that the new management has no interest in 'paper plays' and wants to build the company from a solid foundation based on mining properties. Stanley Ford, a member of the board of directors for Solidor has a good history of turning stocks around, including his company, Pallaum Minerals [PLM.C] which went from $0.70 to a high of $3.00 within a few months last year and is now in a good position, with cash in the till and viable properties.
While our initial reaction was definitely dissapointment in the fact that the company could not do what it intended under the current structure, we are still confident in it establishing itself once it re-organizes and expect to see Solidor in an excellent position by late Spring.
Tom McIlwain |
