In my opinion, Wega Mining ASA has a severe structural flaw (at least as a major shareholder invested in the same investment as me). In my view, Wega Mining ASA is too heavily influenced by one person. Jan Haudemann-Andersen:
“Mr. Haudemann-Andersen is a private investor and owner of Datum AS. …… Mr. Haudemann-Andersen is chairman in Datum AS, Wega ASA, and Maximus AS, ….”
http://www.wegamining.com/employee.cfm?path=2,19
Ownership in Wega Mining is as follows (per the Wega Mining website – at Jun 16’08):
*Datum AS – 32.06%
*Wega AS (this is an investment company, with this person being the Chairman of a 3 member board) – 4.81%
*Maximus AS – 3.37%
http://www.wegamining.no/section.cfm?path=14,35
It means that this one solitary person, Mr. Haudemann-Andersen, has either direct ownership, or significant influence, over more then 40% of Wega Mining ASA’s issued shares.
If this one single person had a specific mission in life, and had no problem with spending $23M to simply get his point across (regardless of the severity and the extent of the collateral damage to others), who associated with Wega Mining ASA would be able to stand up to this individual?
4 comments:
You make an interesting point, Production05.
At the time when Wega invested in CMM, Mr Jan Haudemann-Andersen was their Chairman. He remains Wega's Director & its largest shareholder (directly & indirectly). What was surprising to me is that in 2006 & since, Wega did not seek at least one seat on the BOD of CMM. Or maybe they did, but their wish was not granted?!
What I also find interesting is that Mr Ron MacArthur (a Canadian mining Executive) is also on the BOD of Wega. One would expect that they might have some plans to expand their world-wide mining operations into Canada. If that is the case, why not just take-over CMM. Right now it could be done for 6 cents on the dollar.
Wega were idiots if they handed over $12 million to PK after an extensive DD but idn't insist on a few beneficial terms and conditions in the agreement. They were buying on the open market long before that deal too. What did they see that they liked?
We shouldn't give them too much credit for investment smarts! Their bankers are just about as clueless. It appears to me that they've somehow circumvented the securities laws. How can they not be considered a CMM insider while Scion is? They're CMM's largest institutional shareholder!
optimus, I think Wega got sucked in like the rest of us. Check out what they had to say about Century in their June 2007 corporate presentation:
Wega Corp Presentation
This was after CMM reported an operating profit of over $5 million in Q107. Wega was expecting Shahuindo/Atimsa to yield up to 4 million oz and they were forecasting 35,000 oz from Rosario in 2008.
Wega started selling right after CMM dropped its takeover bid for Sulliden.
Carib,
The sequence of press releases in May 2007 suggests that Wega, unlike the other CMM shareholders, knew in advance about the Rosasio and Shahuindo. Their open market buying via Byron and RBC(?) during late April - early May 2007 indicated that they knew something was brewing. Wega conducted their DD and should have no excuse that PK sucked them in. Wega's bankers Pareto were postively gushing abut the experience and knowledge of CMM's management in their report. How is it possible that Wega is not considered an insider by the BCSC? Shahuindo always was a risky venture which is why PK structured it like an options deal. Wega and CMM were two bad partners. IMHO
1) From the May 7/07 Century Mining press release:
[The Company also announced a non-brokered private placement of units raising up to C$12 million. Each unit is priced at $0.89 and consists of one share plus one-quarter share purchase warrant exercisable at $1.17 for a period of 24 months. After 12 months the warrants will become exercisable within 20 days if the 20-day weighted average closing share price exceeds $1.25. The shares will be subject to restrictions on resale for four months. A large portion of the placement will be taken down by a significant European mining group.]
2) From the Wege 2007 report - transaction date was May 14/07 ($12million PP)
3) From the May 15/07 CMM - Wega Joint press release:
[Lars Marius Furu, CEO of Wega Mining said: “We are pleased to make this arrangement with Century Mining. Century’s current operations are making good progress and there is considerable value to unlock. We are also excited about the company’s growth opportunities in Peru, for which the main proceeds from this placement will be used.”]
4) From the May 16/07 Century Mining press release:
[Margaret Kent, President & CEO of Century, commented, “We believe that there are over 2 million ounces of gold and gold equivalents at Shahuindo, which makes this an exceptional project for Century. We are going to build a mine at Shahuindo. My exploration team and I have visited the project and we view the Atimmsa property as a very exciting addition to the core Shahuindo property. Century has significant experience operating in Peru, with two producing operations and over 500 employees. We are also confident in our legal position in the litigation surrounding the Shahuindo Project. Rosario de Belen is similar to Shahuindo as it is located in the same district and is an open pit heap leach operation. This will facilitate extensive operational synergies, and we plan to build a similar but larger operation at Shahuindo. Shahuindo could be operational as early as the 4th quarter of 2009, with gold equivalent production of 125,000-150,000 ounces per year. This acquisition is consistent with Century’s strategy of increasing production while lowering cash costs through the consolidation of gold assets in the Americas. We are very excited that Century is continuing to grow with a world class asset.”]
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