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Gold/Mining/Energy : International Precious Metals (IPMCF) -- Ignore unavailable to you. Want to Upgrade?

To: BillyZoom who wrote (32338)	5/22/1998 2:22:00 AM
From: Larry Brubaker	Respond to of 35569

Robert: OK, I'll acknowledge the $1 million owed to Omega does not affect day to day working capital. I'd also guess there is no hurry to pay off the outstanding debenture. But what about the $900,000 of accounts payable which is not part of the Omega debt? That $900,000 alone would eat up all of their cash, and plus all of the MGAU shares. That leaves them with the big zippo for spending money. Another thing, what do you think will happen to the value of MGAU shares when IPM puts a million of them on the market? Let's put it this way, I wouldn't be caught dead holding that stock right now. Wish I could figure out a way to short it. And how in the heck could there be a dispute between IPM and MGAU about who owes whom money? The same people run both companies, for cryin out loud. I also notice they didn't announce they issued floorless convertible debentures during the last quarter. Yeah, their backs are to the wall and they arranged a small amount of financing during the last quarter. However, the nature of the financing is the sort which destroys the stock price, as we have seen. Now who is this high caliber person you are referring to?

To: BillyZoom who wrote (32338)	5/22/1998 3:17:00 AM
From: Larry Brubaker	Read Replies (1) \| Respond to of 35569

Apparent Insolvency, Part III OK, lets try this from one other perspective. Assume ALL of their current liabilities don't have to be paid right away. Let's just look at cash. They've got $500,000 in cash, which happens to be collateral on a loan of the same amount. So, can't spend that. They've got 1 million shares of MGAU, current value of 46 cents, or $460,000. They say MGAU owes them $240,000, but MGAU says IPM owes them $50,000. So, I wouldn't count on the $240,000 "owed" by MGAU. I was wondering why the heck would they borrow $500,000 when the collateral for the loan is the loan proceeds. The answer, obviously, is for short-term liquidity so they don't have to sell all their MGAU shares all at once. But since the collateral for the loan is a cash deposit of $500,000, it seems clear they must maintain a cash balance of $500,000. Therefore, in order to pay the bills, they are going to have to a) sell more shares (and their most recent sales have been of the floorless convertible nature) and/or b) sell their MGAU shares. Sure wouldn't want to be holding MGAU right now.