I have a theory on a potential scenario.
Facts:
*significant investment by Stan Bharti and Aberdeen in SUE
*Aberdeen VP now on SUE's BOD
*Stan Bharti and Aberdeen had an extremely close relationship with Desert Sun Mining (it was one of Aberdeen's biggest success stories). From their website: "Aberdeen will provide valued-added managerial and Board advisory services to companies as we have done with much success in the past, most recently with First Uranium Corp & Desert Sun Mining"
*the former Desert Sun trio now control 43% of CSM's BOD (meaning, these Aberdeen connected guys will probably be able to do whatever they choose, and it wouldn't take much to win over the CSM BOD):
1) Stan Bhanti - he was Desert Sun's Chairman
2) Bruce Humphrey - he was Desert Sun's CEO
3) Peter Tagliamonte - he was VP & COO at Desert Sun
*SUE's share price skyrocketed last week
*CSM's share price surprising (relatively) strong over the past few weeks, even while other company's in the space were selling off significantly
*CMM's share price dropped even further this past week (establishing even newer all time lows), which potentially signifies that they are not currently targeted to be acquired with SUE (if SUE is indeed being acquired).
Here is a potential scenario:
CSM try to do this in phases. First they buy out SUE at a significant premium to get their half of the negotiating rights to Shahuindo. The SUE jump in share price would support this. SUE shareholders benefit from A) the instant rise in share price and B) future increases in CSM share price at later dates. The fact that CMM's share price didn't receive a positive bump means that they are not included in this first phase.
Once CSM has control of SUE then they can start talking to CMM about a number of possibilities, including:
1) cheap merger with CMM (CMM would probably get ripped off big time)
2) a Shahuindo J/V between CMM and CSM
3) CSM offers to buy out all ownership rights (from CMM) to Algamarca (if possible) - with say a $20M premium paid to CMM (or something CMM would find hard to refuse - funded by Aberdeen). CMM can then use the $20 to go development crazy on their other properties.
Anyway, this is only one possible scenario. Who really knows the truth I suppose, right?
Regardless of what SUE, CSM, Aberdeen, or anyone else is cooking up for Century, the bottom line is that Century needs to get going with some positive news - until then, we are dead in the water, unfortunately.
Production05
3 comments:
Interesting theory, Production. I don't think Stan Bharti bought into SUE for "investment purposes", so your theory does make a lot of sense. However if I'm a CSM shareholder, I don't know if I'd be too thrilled if CSM made an offer for SUE based on their current market cap of about $50 million, without some assurance they were buying more than an interest in a lawsuit.
There are a couple of other possibilities:
CSM may think that CMM won't be able to raise the funds needed to retain the property rights to both Shahuindo and Rosario and will default on the Algamarca agreement, and with CMM out of the picture, perhaps Algamarca will negotiate a settlement with SUE/CSM. With CMM out of the way, they wouldn't need to make a takeover bid for them.
Or if CMM is able to retain their Shahuindo rights through a renegotiation of the payment terms for Shahuindo and Rosario as they alluded to in their March 25 NR, then CSM/SUE might approach CMM to propose a friendly merger of all three companies.
Certainly CMM will be in a much stronger position if they are successful in renegotiating the payment terms with Algamarca and hopefully we'll hear more about that soon.
Good analysis, Production. I just hope that our (i.e. CMM shareholders') pockets won't get picked clean if a SUE-CSM-CMM recombination is in the cards.
PK should have stayed away from Shahuindo with its prior litigation history dating back to 2004. With out-standing litigation, you are never in complete charge of your corporate destiny. Very poor judgement on PK's part. Instead, she should have concentrated on Lamaque to generate some steady cashflow. Then our share price would be over $2.00 right now.
No wonder nearly 50% of posters/visitors want her to step down right away as CEO. On that issue, I am with CARIB thinking that PK deserves a final chance.
By the way, what do you think of the role(s) of Scion & Vega in CMM's future "evolution"?
Carib, the massive fluctuations in the SUE share price is certainly interesting. They closed at $.45 today - 36% off their recent high of $.70. That would suggest that there are a lot of speculative dollars bouncing around on SUE. I think you make some key points there. Perhaps the wind has been blowing the SUE price around based on rumours on the (deferred payments) renegotiation process. Perhaps there was a rumour of renegotiations not going so well for Century, hence the SUE share price run up to $.70. With the drop to $.45 today, perhaps the rumour has cooled off, and maybe those people might even be sensing that the deferred payments deal is much closer to being finalized (hence they are less hopeful of the Century defaults they might have been banking on).
Hi bigjohn37, welcome to the blog, and thank you. I agree with you, PK should have stayed completely away from Shahuindo. It has been nothing but a thorn in our collective side thus far. To be honest, I don't have a problem if CMM sells the rights to Algamarca (for a major premium of course) and walks completely away from the entire situation - Shahuindo will not be producing an ounce of gold for at least another 3 years anyway. Clearly, our bread and butter (our company maker) resides elsewhere.
I have one final thought on Shahuindo. Back in May'07, Century was in transition. Sigma o/p was falling apart and Lamaque (although had a lot of promise) wasn't as established at the time. PK probably felt that she needed another significant asset. Given that Sulliden shareholders had suffered in the courts for 5 years (and lost tremendously in share price value), she probably thought that presenting a way out would be a win win for everyone involved (Century, Sulliden shareholders, Algamarca, etc.). Obviously, it turned out to be a very unfruitful path to take (putting it as nicely as I can).
I guess the bottom line is that our situation if completely different now than it was in May'07. We officially have 4.6M ounces (43-101) of gold in the ground, and hopefully it will be close to 5.5M with San Juan. Century is not desperate for Sulliden, Central Sun Mining, or anyone else for that matter. Management just needs to execute on what we do have and we will be fine. Quite frankly, Shahuindo (and everything associated with it) is just weighing us down at this point.
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