Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Winspear Resources -- Ignore unavailable to you. Want to Upgrade?

To: Digger who wrote (17469)	4/2/1999 10:40:00 PM
From: jack hampton	Read Replies (1) \| Respond to of 26850

Agree. You cannot dissolve a jv with a press release. There is big time bad blood here. WSP are rookies in my opinion. Geologists not ready for the big time.

To: Digger who wrote (17469)	4/3/1999 12:47:00 AM
From: Gord Bolton	Read Replies (1) \| Respond to of 26850

Hello Digger, I suspect that you will not hear a whole lot of inflamatory stuff from Winspear about the suit. Aber must present a case that will get them in the door of the court. Winspear did not dissolve a JV by a press release. Winspear applied the terms of the JV contract. Winspear is the operator of the program. The JV partner can contribute money to the development of the program or be diluted in their interest. Winspear prepared a very detailed exploration program which included a budget and presented such to Aber. Further to that they had a meeting with Aber to discuss the program and budget. Winspear would need to know in no uncertain terms if Aber desired to contribute money or if Winspear would have to raise funds to cover the entire program. The workers on the job would need to be fed and paid. Bills would need to be paid and in some cases I am sure that money would be needed up front. The budget was in written form and very detailed. It was presented to Aber in a timely fashion. Aber have not claimed to have any problems with the program at all. At this point the ball was in Aber's court. It was clearly their choice to give formal notice that they were in and that money would be provided and forwarded. Aber made no response. They issued no press release. They sent no letter. They sent no money. Aber has presented no official committment to the program prior to being notified by Winspear that in the absence of such Winspear had arranged to finance the entire program itself and to apply the dilution formula of the JV contract. Winspear did not send the letter until the program was well underway. Even if the contract does not spell out the deadline for a response to a proposal (and I believe that it does) the entire program is or was still speculative in nature. You cannot ante up after looking at your cards and you cannot put your marker down after the wheel has stopped. By not responding to the proposal the ball was back in Winspear's court. It would now be Winspear's choice to scrap the program for the year or proceed with the program and apply the dilution formula. Winspear took all the risks involved with lining up the crew and equipment, transporting everyone and everything to site, managing the program, and achieving the objectives of the program. Winspear went ahead and did the program with no cash or commitment from Aber. Winspear exercised their right at this time to increase their percentage interest in the program accordingly and sent notice to Aber that such had been done. If the program was a total flop from start to finish Winspear might not sue Aber successfully for the costs. Aber would simply respond that they would prefer to be diluted or alternately that they had not approved the program so they should not have to contribute. There is nothing new, complicated, unusual or mysterious about this process. A formal proposal was made and Aber had an option at the time. No formal reply was received even after the program was well underway. Winspear board would be obligated to protect their shareholders and exercise their prerogatives in that regard. Nothing was taken away from Aber. So what is going on now and why? Aber had lots of cash and if they wanted in why did they not make sure that they were in, send the notice, and make sure that the cash was available? Well Aber does have lots of cash-raised at $14.50 per share and all earmarked for Diavik. A prospectus was issued by Aber to raise the cash. Aber could divert money to Snap Lake by ammending their prospectus. Ammending their prospectus would give investors the option of taking their money back. Aber shares were trading around $7.00 per share prior to Christmas. Maybe best not to mess with the Prospectus-you think? They could lose Diavik or percentage there if they did not make their contibution. Or they could end up having to raise more money and dilute the value of the current shares. It appears that Aber was in a bind. If they got heavily committed and spent Diavik money without ammending the prospectus and if the program flopped investors could take back their $14.50 per share financing and Aber would be in a bigger bind. What to do? Stall Winspear and see how things turn out. If it goes great we are in and we said we are in and investors will be happy that we are in and increasing value. If it flops we are not in and never sent formal notice that we are in. Winspear shareholders should not have to carry this kind of baggage for Aber. They are either clearly in or out before the program begins. No ammended prospectus, no notice, no cash and program is half done. Aber must be out and diluted. How unfair, but, but, but...