Repost from stockhouse SKG
Read this interview with Mr. P. Romanchuk and then go to these news releases. They will explain a lot.
E mall Opening at www.NorstarMall.ca - 6/1/99
TSE Trading Halt Re Sikaman Gold Pending News - 6/1/99
Company Website at www.sikaman.com - 5/26/99
TSE Trade Resumption Re Sikaman Gold Resources Ltd. - 5/25/99
TSE Sikaman Gold Resources Ltd. Trade Resumption - 5/25/99
To Acquire Proprietary Optical Disc Drive Technology - 5/25/99
Trade Resumption Re Sikaman Gold, News Out - 5/20/99
Sikaman E Commerce Mall Acquisition Update - 5/20/99
SKG-Sikaman Gold=Interview with Mr. Paul Romanchuck
Good evening this is Jordan Ness of Wall Street my guest today is Paul Romonochuck He is the CEO of Sikaman Gold. Paul if
you could please begin by giving us a little bit of a biographical overview of the companies operating history. Take us from the
genius of the company up to date through the chronology of how you've grown to where you are today.
Mr. Romanchuck Well first of all I'll hit a couple of the high points right from the companies origination and if I recall correctly it
was formed and became public company in 1985 and from the period of 1985 throughout 1997 it basically became involved in
something like 4 or 5 international mining projects, some of which had some production and if I recall the high value of the
stock
trading during that period it hit something like just under $8.00. I got involved in May 1997 and when I was involved there
were
no operations whatsoever and basically it was what we would call a semi- dormant shell. It had had a couple of failed
transactions in the previous two years, but the one thing it did have, because of its long history was a very good shareholder
base. My understanding of the shareholders at that time was approximately 5000 Canadian shareholders and 3000 US
shareholders. And it did not have any significant liabilities because it had been funded by equity in the past, and any debts had
been resolved. So basically what I was looking for was an opportunity to have a TSE listed vehicle that was relatively clean,
good shareholder base, no liabilities. I would then set upon putting in some development projects based on domestic mining in
Canada as opposed to the international projects, and to that end starting in may of 1997 we started working on several
projects
and during the period may 1997 to date being just the most recent 2 or 3 months we have lined up 2 projects and have a third
one that we are very close to completing which are basically base metal projects that are former projects of a couple of the
majors in Canada They both have production, they both have reserves and they are situations where technically they would be
very close to production in this end and with respect to providing capital for these projects I developed a deferred royalty
financing which is rather unique in the country and completed that transaction in Dec.1998 And that financing will be providing
us with 3 million dollars initial cash during 1999. And that cash is for corporate purposes and not necessarily designated to the
projects. With that in end we have received the initial 6 or 7 hundred thousand, some additional funds are due shortly and the
balance over 1999. Basically we are looking at how we will deploy that capital in the short term. Approximately 4 or 5 weeks
ago because of some transactions of some other junior mining companies, our stock came under scrutiny and there was some
speculative interest that snowballed a fair bit. And all of a sudden our shareholders were looking for us to look at Internet or
High Technology issues which is what a couple of other companies announced. Since that time we have gone through a handful
of projects and picked what we think are the two highest quality projects. Ones that are closest to the market and closest to
revenue generation, net income generation and cash flow generation. And because of my background as an investment banker
for the last 20 years, and having worked on a number of these in the past,. I've actually completed a couple of these types
transactions as recent as 18 months ago. And so basically we had a very good pipeline of information on the Internet and High
Tech situations and we managed to conclude letters of intent and are currently working to close those shortly. And based on
that, for the current time we're looking at providing a vehicle for these two deities, nurturing them, getting then into the market
and then making a determination of the long term structure of the company whether we split the company or whether we vend
the mining asset. All these opportunities will be reviewed by the board and we will probably be doing that in the nest 30 to 60
days
"Jordan". Now I think it's probably dermain to, in this discussion, to learn a little bit about you background. You mention that
you are an investment banker. Where did you work prior to coming to this company and maybe you could just elaborate a little
on you background.
MR. R--- O.K. Basically starting from square one with an economics degree I became a chartered accountant in 1971 with
one of the major firms. I worked for local regional government; I then went to work for the federal government for a year as a
director in the auditor generals office. Came back into public practice for about three years and then in 1979 I went to Calgary
and worked in corporate finance for one of the major oil companies. 1981 I joined Pemberton Securities that was probably the
premiere western investment firm in Canada. Did a lot of work for a couple of very significant in Alberta including the
government. As far as investment banking and privatization of Canadian airlines and a number of other major projects. Became
head of corporate government finance for the firm in Alberta. In 1985 I moved to Vancouver as head of corporate and
government finance for Pembertons nationally. Became head of capital markets at that time and I think 1986 which was
everything but the retail investment broker. 1987 became CFO and in 1989 you may recall that Pembertons was sold to
Dominion Securities and the Royal bank. I had a three year agreement with the bank but after we completed the merger I
negotiated my way out and since 1989 I have been working on a private basis doing private funding and merchant investment
banking activities. I've been involved primarily in the resource industry, oil and gas, as well as in the mining industry. Since 1990
in a private basis I have probably been involved in raising approximately 5 to 6 million dollars privately, for these various
operations, and also I have probably done about 3 or 4 M&A transactions during that period as well.
"Jordan" Now in terms of understanding your strategic focus for the future of the company can you lay out for us where you
would like to be in the future . What is some of your initiative there?
MrR-Well as far as initiatives and I think I will speak on the basis of the two divisions. First with respect to mining even if with
end up doing something with it's going to be on the basis on that we have a domestic producer and focusing on domestic
production in Canada today there's something in access of 800 mining companies registered. There are less than 80 mines and
they are owned by approximately 30 to 35 companies. So basically less than 5% of the mining companies in Canada have
production income and that's how we wanted to set ourselves up as a junior mining company. There are ample opportunities,
all
of the base metals and gold are at sepal lows all at the same time and there are currently projects that previously have had the
involvement of some of the major mining companies that aren't the giant elephants situations and basically they already have
production facilities nearby. And the cost of entering into those projects is incredibly low. Most people would suggest that its' a
difficult situation in mining, but if you were trying to acquire good value for mining assets there hasn't been a better time in the
last 30 or 40 years. So the focus as far as the mining is domestic production where we have good control and we has no
question with respect to the ore body or the production facility. And therefore we shouldn't have the kind of risk of getting into
projects where you have to foot all of those capital costs upfront. With respect to the technology and the internet situations, we
wanted to make sure that we ended up with two projects at least if not a third one, that was well developed so that we came
along as it was getting into the market. Where we could be very comfortable with respect to the costs of entering the situation,
where we expected that there would be significant revenues at hand .Net revenues and positive cash flow. And with both of our
situations we feel comfortable that that is the situation. And what I wanted was to have at least 2 or 3 different arenas where we
had comfort that if one of them had a slight delay or problem we would have at least two others. So I didn't want to be a one
horse company in the high tech area as well. And from that perspective we also want to diversify in that area to make sure that
it
wasn't just consumer and so in our first two situations, our Norstar Mall is focused on the consumer end of the internet situation
where as on the Paralite acquisition we just completed the focus is the business to business application s in the high technology.
And so from both of those we are trying to come up with what you might call a nice portfolio approach in the high tech internet
sector.
Jordan-Now I want to go to to the May 17 news release put out by Reuters. For investors who haven't kept a pulse and kept
monitor on the recent events, actually was announced back on May 17th that the trading in your stock on the TSE, you had a
jump on that day of 71%, which seems that shareholders have really responded to events pretty positively.
Mr.R From my perspective they have and I think the mandate and the requirement of management at the present time is to
make sure that that initial confidence is recognized and that we can deliver. And by tabling these two projects that we have put
in front of them, being the Norstar Mall and the internet and on the paralite high technology situation, we think we have
responded to what they were looking for and basically that's tabling two of the highest quality projects I could find in the market
today and hopefully that will stand the test of the public scrutiny to give them comfort, that we did not simply grasp at something
that was flying across our desk or out in the ether and basically we were able to deliver something that was as well developed
as what any market could have expected ..
Jordan…Now in terms of understanding how you void this initial excitement and this initial confidence that you eluded to what
kinds of things do you have planned, and I know you can't talk too much about forward looking events, but what kinds of
things
do you have planned that you think the market place might react positively to again in developing these other auxiliary
strategies.
MR. R As far as we are concerned and without going to far and getting into detail s of potential situations that may come along.
We are looking at these two situations as providing the critical mass and we are looking at extensions of them. If I did not focus
on anything else but situations related to either one of these entities from my perspective have got enough to turn them into at
least an intermediate if not senior high tech or internet company in the market on its own today. And that's because of the depth
and breadth of the capabilities of the people and the projects that are involved. I'll just give you five seconds on each one of
them. Basically as far as the retail mall situation what we have has the capability of being the premier Canadian Internet Mall bar
none, with probably the highest quality of tenants that any mall could assemble. And by the same token we are looking at a
massive advertising program on various types of media including TV commercials which we already have done and including
some joint ventures relationships with some of the most significant communications groups in the country, and those we are in
the process of finalizing. Clearly with that kind of joint venture arrangements and that kind of market I think its clear to see that
situation alone is a significant business project and has got a lot of depth to it. On the other hand the one we just announced
today being Paralite, basically that technology has got applications in virtually every piece of computer equipment out there, and
basically what it does is whether it's a CD, DVD or any kind of information storage the multi head technology is clearly the next
step as far as high speed information processing. And the technology and the patents are in place. A couple of the majors have
apparently tried to patent products around it but have been unable to. And that's the comfort that we have, that project being
paralite with the multi head optical disc drive technology its clearly going to have application in virtually every aspect of the
computer industry.
Jordan Now I think we should take a step back and elaborate just a little bit for those in our investment group that are unaware
of Paralite and Norstarmall.ca and even Evision interactive. Perhaps you can give us the lay of the land in terms of your impious
for wanting to get involved with these projects. And number 2 what this could potentially be in terms of shareholder value and
of
course the most important thing which is growing the future of your business
MR. R Basically in giving you a little bit of background E-Vision, Norstar Mall Group were developed as a division of another
public company in the past and it was spun off to the existing owners about 12 months ago. And basically this project being the
Internet mall has been in development for approximately 2 years and has had about 3 million dollars of capital committed to it
to
get it to this point and time. Judging by that time frame I think you could appreciate that the people involved had the concept
nailed down well before a number of other parties. And based on initial response by market participants not by ourselves
There's public information out there by other reporters and other situations who we gave access to the site and they have come
back and said very clearly that the site, the operation and all aspects of it are clearly head and shoulders above virtually every
other internet mall out there. From that perspective this is clearly some of the highest quality technical capability available today
and that's what we acquired in the E-Vision Group as far as that kind of technology and staff. And this staff has been with the
project since conception and they are staying on and have no problem maintaining their interests. Taking a step to the other
side,
the paralite situation. The paralite technology, basically the multi head optical disc drive and it was developed by the existing
founder of the company, an individual called Steven Dur, who is producer of an Emmy award winning TV Series and he has
produced situations for virtually every major television studio and movie network in the country. And basically he got into this
area due to the need for a high quality and fast medium for maintaining information and storing a lot of the media requirements
they've had in the past. I think they have gone through about 3 million in capital developing it in conjunction with a couple of the
major partners in the industry working ion the background. And if I can recall correctly it was the 3M optical group that built
the
prototypes for him and there have been a number of major parties examining the prototypes, testing them and having
preliminary
discussions with respect to preliminary joint ventures that some of these parties are looking at using this technology. And this
technology is really the evolution from a single head disc drive to a multi allowing for higher speeds and multi users at the same
time which is clearly what the requirements are for the future as far as CD ROM and DVD.
Jordan If you can sum up our discussion today by telling us the things that most excite you about the future of the company and
maybe you can also wet our appetite by leaving us with some things to look forward to in terms of what people who are
potential shareholders as well as current shareholders can look forward to .What can they expect from the company moving
forward?
Mr. R Now I think based on my background in the industry and with respect to making sure we've got two of the highest
quality opportunities that I've seen out there. I expect that we are going to be able to deliver what we said we had, what we
said
we were going to deliver. I think the first test of that is what we've brought to the market. The Internet Mall is going to have
significant joint ventures partners some of the largest and most credible people in the industry. And those details will be
forthcoming. On the Paralite situation we are going to be dealing with some of the giants in the computer industry as far as
licensing our technology. In both of these things we do not require any additional capital to go forward from this point and time.
I will not be relying on any public markets for any financing and from that perspective we have reduced the technological and
development risk and capital risk on all of these projects from this point and time. And the question with our stock perhaps has
been raised in the market most is the fact that we have a lot of shareholders out there from past transactions, so we have about
160 million, 170 million shares out, with these transactions it will be up to 180 and from my perspective there's talk of
consolidation other factors and I take the reverse look at this and basically with these two projects at this stage of development
and with the lack of capital requirements in the future we are looking at providing as much of a boost to the expected earnings
as we think the market will require. And as a result at this point and time we do not anticipate a need for consolidation. But I
would rather work at it from the other end and generate an income stream which will support the existing shareholder base.
And
from my perspective I don't think we have to go much further
Jordan Well audience you have been listening to Mr P. Romanchuck CEO of Sikaman Gold. In case you tuned in late there
have been many, many exciting announcements from the company and I would encourage you to check this out in a little bit
more detail. The company has announced that they have the requisite funding which would be necessary to complete the final
marketing program for several products using the multi optical disc drive technology. Paralite is confident that based upon their
recent activity a licensing arrangement for their first application of their core product could be achieved within the next 6 to 12
months. But that's really just one segment of this story and I would encourage you to please check them out in a little bit more
detail and the ticker symbol is SKG .TO and they trade of course on the TSE or the Toronto stock exchange.
Good reading. Ignore the mistakes.
Beckie |
