A Fast Foward/Reverse to See the Progress Made Over The Past Couple of years: Summary of Some Interesting Contribution to This Thread.
(Go Get a Java):
EXL/GME: Facts, Figures, Fantasy & Quotes (from 1997/8)
... the $1.5 million convertible note was part of the financing to buy Hemlo's 60% interest at the Glimmer mine. This done back in early 1996. Apparently the Roman Corp. now owns quite a sizable block of EXL shares. Winzer - the PR stated 9.9% of issued (if not mistaken). This would put the number well over 2 mill shares.
I really don't know other than with the reserves present we "should" see 3-4 times the price based on the Glimmer Mine. But I'll be happy with a double! Mike
noticed EXL takes a $7 million write down in anticipation of Glimmer profits. The increase to 800 tpd is excellent news. It would be interesting to know what the grades are averaging.
I have been told that they are currently having a power line brought in. That would be 27.6Kv 3 phase. They have been using diesel gensets so far where required and 13.8Kv single phase for the office. The power line to EXL is complete.
... the last PR (4/22/97) states that diamond drilling continues and the deposit is open on strike and at depth. This is all I know. I agree the fundamentals seem very strong. Info hard to get. Will probably stay this way until the court reaches a decision.
The only other news I have is that the employees have been given an option to buy shares. I do not have details at hand.
<PR>
Glimmer Mine - operations forecast to be sustainable from cash flow by June.
Friday May 23 1997
Mr Stephen Roman reports
Further to news in Stockwatch March 21 1997 that Exall had commenced
proceedings against Matachewan Consolidated Mines, Glimmer Resources and George R. Kent for clarification of the Exall/Glimmer joint venture right of first refusal and related remedies and relief, and had received proceedings from Glimmer seeking similar clarification and relief, on May 22 1997 on motion by Exall, it was ordered that any cash calls or new work plan be implemented only with court approval until the hearing to be scheduled for July. Exall achieved the first gold pour from the Glimmer mine in April. Operations are forecast to be sustainable from cash flow by June. Current mine operations are continuing.
Winzer - below are armchair estimates only based on cash flow.
800 tpd
365 days per year
0.33 opt
95% recoveries
cash costs US$220
gold sales (hedged) US$370 plus
est. cash flow to EXL C$12.5 million
est. cash flow to GME C$6.5 million
As a rule of thumb most N. American mining companies trade at a multiple of cash flow per share. Current mine life based on 350,000 ounces would be about 3.8 years.
I would guess EXL has about 30 million shares FD and GME 5.2 million
This would give us EXL @ C$1.61 and GME @ C$4.75
As commercial production nears shares of both companies should trade at much higher levels. Unless there is a disaster at the Glimmer Mine it would seem that both companies offer significant upside potential with little downside exposure.
James
Glimmer $1,500,000 convertible debenture
Winzer - this should be excellent news for GME shareholders
GME-V
June 4, 1997
The VSE has accepted for filing a non-brokered $1,500,000 convertible
debenture private placement. The convertible debenture has an
interest rate of 8% per year payable quarterly and is convertible for three years at $1.10 per share in the first year, at $1.265 in the second and at $1.455 in the third.
Warrants:
For 500,000 shares
Wt exercise price:
$1.10 in year one; $1.265 in year two
I will fill in details when next I meet my source.
I know 2 men who work at Glimmer, and both tell me variations of
the same thing. The place is RICH!
I was told by July 15th (1997) the case should be settled, perhaps will see a bit of action to the upside when this is out of the way. Court hearing July 14-15. Decision expected. No comments were made as to the possible outcome(s); theoretically anything could happen. EXL is talking to GME about possible out of court settlement.
What was your source told about the reason for the "thin" paycheques? At the EXL annual meeting we were told that EXL still has $2 million or so in the bank.
Could EXL be "conserving" cash until the lawsuit is settled?
For all intents and purposes, no further drilling will occur until the case is settled. But production will continue, with EXL paying 100% of the cost upfront and then GME paying after case settled.
Since EXL/GME do NOT have a formal joint venture operating agreement with everything spelled out clearly, they are asking the judge to "fill in some of the blanks".
One of the blanks is the 15% management fee, which is not spelled out right now. If GME wins everything and has to buy out EXL's share, then GME will need a lot money. In either of those two scenarios GME may have to raise additional capital, which Mr. McCloskey concedes it may not be easy, but he hopes that once the case is resolved the stock will go up and it will become easier to raise money.
In a way I wish the two companies would just merge (in a share
exchange) and be friends, which would be better for everyone
My thoughts are it doesn't pay to do business with friends or family and to go for the throat. This is what EXL did when they decided not to stay with the contract mining plan - bring in their people and tack on a15% surcharge to GME. IMO - management of both companies has failed to serve the interest of their respective shareholders with this lacking JV agreement. Such a shame. Exall has already made it clear in a previous press release (Nov.27/97) that they will
appeal a decision not in their favour. If that happens, add a few more months to a year.
I hope for everyone's sake that the two companies are talking to each other about some creative solution, i.e. merger, settlement or a sale to a third company of the Glimmer mine. I wonder if this (or other idea) was floated around at the PDAC.
Bear in mind that the higher the gold resources (and they
could get even higher in the next calculation), the higher the stakes in the dispute.
Each party will vigorously defend their position.
must point out, however, that EXL version of events always seems more optimistic than GME's. One reason for the delay in the referee situation is that it took several months (from the January 30, 1997 press release until ___?) for the two parties to even agree on how to interpret several points of the judge's January/98 decision. As they seem to be fighting tooth and nail over every point, the idea of an out of court settlement seems very optimistic.
From that I can only speculate that even a great resource calculation released in the midst of a slow-moving legal dispute will produce little benefit.
They estimate that by Q2/99 60-70% of the ore will come from stopes and 30-40% from development ore. They expect significant lower cost in 1999. Management/Directors own 40% of EXL shares, institutions 20%
I learned today (June 17, 1998) that Battle Mountain (BM), who is entitled to an NSR from EXL's share of the project, is litigating EXL over non-payment of the royalties. Apparently as a result of the EXL/GME litigation the funds have been frozen by the court, including the royalty payments. EXL and BM are cross litigating over the royalties now. I gather than only when EXL/GME is resolved the royalty will be resolved too. The total royalties so far are about $150K, and every month adds another $20K or so.
EXL and GME have been talking about an out of court settlement for the last two months, exchanging proposals and counter proposals. It was mentioned that the two parties will either settle now on their own, or the litigation could go literally for years.
The main point of contention is not just the ownership %, but also who will be the operator. Both want to be the operator, and both claim that they (if they are the operator) will do a better job running the mine. This is the one issue that neither seems to budge on.
It was conceded that both sides would have a lot to gain by settling on 50-50 "as long as I become the operator".
It is noteworthy that, contrary to last year's EXL AGM, the litigation issue has completely dominated the Q&A portion of the meeting. EXL's shareholders are feeling the pain the dispute is inflicting on the stock (even more than the low price of gold).
Shareholders are asking tough questions, such as "why don't you just settle for 50-50 and go on to develop this mine?". It appears that they might be willing to settle for 50-50, but again, who would become be the operator? that is the divisive issue, and EXL has indicated that they will not budge on that one.
As far as settling on a %, the two parties are not that far apart.
As far as the 15% management fee, it no longer applies since January 1998. Instead GME is charged supervision costs.
Apparently while the two companies are talking about settlement, the referee is postponed.
I gather that outside parties (as well as shareholders) are putting pressure on the two parties to settle. The Battle Mountain royalty situation could be another. I don't know what rights BM has to the mine (or to EXL's portion) if the royalties are frozen.
GME will not pay or receive money from the JV until resolved. EXL can use gold proceeds for day-to-day operating costs, but not to undertake a capital program of exploratory drilling on the Glimmer Mine (requires GME's concurrence). |
