Prices are getting better, and costs are getting lower, but also money to do things is an order of magnitude scarcer, so the deal has to be an order of magnitude better, which is as difficult as ever to promote, as nobody wants to do nuttin' at all, except count cash right now. Even when times are good it is difficult as hell to get a loan with a going concern where you have built in receivables, orders etc.. any shake in the tree and all the money monkeys end up blown away in the breeze, to mix a metaphor a tad.
You cannot even give cash away when mass hysteria hits the markets. Man is not a rational animal. Buying when blood is running in the streets means that you intend to buy for ridiculous prices, because right now, that is all its worth.
It's hard selling an issue right now. We are kibitzing on a salesman Frank Lee Fakir, floating a new deal for Shield. He is talking to one of the more astute investors who has shown an interest in one of Shield's projects, Desmond T. Toote.
Fakir: "Yes Mr. Toote, I realize that it sounds too good to be true, that is because it is too good for the average truth. But when we are telling you, it is not just an average truth, it is a Frank Lee Fakir truth, which has a much higher level of credulousness. That is right, the orebody is already mined out, It's in all the papers. It cost 1 dollar a ton, and the ore returned a total value of $1000.00 per ton. Because it was in a National Park and the Prime Minister's son worked for us, there were no taxes at all for the first 5 years. Profits work out to $500.00 per share US. I guess your asking why we need to sell stock at all, and why the price is only 5 cents, well, it's because all that money is escrowed until we get production permits and the premits will cost us $1 million. We are willing to sell 10 million shares to lucky investors who took part in our lottery and that is why we are on the phone today."
Toote: "Well I dunno, it sounds good. But, gee I kinda like cash right now. The market has me all worried every time I turn on the news."
Fakir: "Good is not what I would call it. I would call it a huge wet kiss and a big smarmy hug from the Virgin Mary with a free ticket to heaven after you live for 105 years. The president of Brazil says its the best deal he has ever seen, it has the public endorsement of the Pope, Jimmy Carter, and the Council for unwed pregnant mothers in eastern Zambia. They all said, and I quote the front page of Financial Post here, "We don't see any downside to this deal. Leverage is unparalleled and it has Hank Paulson's and Barack Obama's personal guarantee that if it goes south, they will step in to pick up the slack."
Toote: "Well I dunno. I will have to ask my wife. We share everything and I wouldn't make a decision without her."
Fakir: "Hey! just a minute. That is what I like, a man who believes in the team principle. Let me tell you, we took the liberty of sending your wife on all expenses paid vacation to Hawaii this morning, and bought her a brand new car! She told us to tell you she is cool with the deal, and go head and spend the kids University money on it, because it can't miss. We hinted to sweeten it we would step up to the plate and make up the diff on your mortgage if interest rates go up and set up a special educational fund where we contribute the first one million dollars for your children and grandchildren's education, and the deal is life insured.. not not with AIG, not that it makes any difference since St. Paulson ordained them.
BTW your mom phoned and she said she wants some shares. She said stop being such a stick in the mud and take some reasonable steps to ensure your retirement will be pleasant. And also, those shares come with a 20 year warrant for 1/4 of a cent and the Fed reserve says there are share buying loans for this issue and 1 point below prime. They said they would take part of the issue at $100 over market to make it nice."
Toote: "So what am I paying?"
Fakir. "Five cents a share, no minimum, no maximum, you can sell it at any time. NO pooling agreement no restrictions. Let me see, pre bids next week are for 1,000,000 at $125.00 per share."
Toote: "I don't know about gold, will the price hold up? Mining stocks.. I am sure I am up to here with them. Last ten deals I did all went south."
Fakir: "I understand. That is why we are enclosing a brand new 10 dollar bill with each share certificate. And no cert has more than 10 shares on it. Yes, transfer fees are paid both ways. Did I mention a Barrick take over is rumoured? Well the rumour came from Peter Munk himself and it was in the Washington Post. Seems he said it on Letterman too. Seems they picked up 9% last week and have to declare their intentions. Munk said frankly that he was after the one billion in cash the company as well as the ten other orebodies and they would go toe to toe with anyone for them. Freeport says this time they checked the assays twice and Strathcona geologists say they will stake their personal reputation on the solidity of the data. Cominco mined a 1000 tons bulk sample from each deposit and say they are in for every share plus ten bucks better than the Barrick offer."
Toote: "Will you take two cents a share? I am convinced. I see it on the National News right now. It seems Obama has commented it in the State of the Union address and directed the USGS to stake the adjoining claims for national security reasons. He would waive all environmental concerns and fast track expansion and permitting on all adjacent land for the good of the economy. GM mentioned that metals from the deposit could invigorate their company, and make a difference in the bottom line. Say that is all sounding good. Put me down for fifty dollars worth. I guess a guy has to take a chance once in a while."
Fakir: "Yes, this business is dicey. It's all risk. Let me tell you." |
