Three days after the CMM news release that announced that the Fortis financing had fallen through, GMP began dumping shares and since then has sold almost 3.9 million shares, effectively capping the share price at 7 cents. Since I don't recall GMP ever buying those shares on the open market, they were likely acquired in one of the private placements early last year. They can't have that many more shares left. They sold 370k shares today.
In the past 3 days, the POG has increased by almost $50/oz and $1,000/oz gold seems to be imminent as more and more investors flee the equity markets and start buying gold, gold ETFs and gold mining shares. It hasn't had any effect on CMM yet because GMP has hit any significant bid of 6.5 cents, but it has substantially increased the value of Lamaque's 1.2 million ounces of reserves and millions more in resources. The increase in the value of the reserves alone is 4 times our current market cap.
This increase in the POG should greatly enhance the prospect of closing the proposed financing. If not, the value of the Lamaque assets are worth a lot more in an asset sale than they were just a week ago.
For an example of how a company's fortunes can change once the fear of not getting financing is removed, just look at Central Sun Mining, CSM. In mid-October it announced the suspension of its Orosi project because it couldn't get financing. Their shares hit a low of 8 cents in mid-December at the peak of tax-loss selling. A few days later CSM announced a agreement with Lihr Gold where Lihr would acquire all of CSM's shares for about 29 cents/share, and since then B2Gold has made a superior offer to acquire CSM. CSM currently trades at $1.06.
Edit: I forgot one.
At $980 gold, $35 oil and an 80-cent Canadian dollar, we'd still be mining the Sigma open pit and if gold continues on its upward projection in the next couple of years, who knows if that operation might not be revived.
1 comment:
Hi Carib,
Here are the equity financings that were closed off by Century over the past 3 years (excluding the MRI debenture, which should not be a factor as yet, with the $.18 conversion price):
1) Apr’06 – Scion may still hold some Century shares, but it is unlikely that it is them selling through GMP. I believe Scion has used Canaccord to sell shares in the past. Plus, (when Scion has sold shares in the past) their sales have been in the tax loss selling period.
2) May’07 – Wega is completely off our books now, as we are all painfully aware (other than 3.4M warrants – strike price $1.17 and expiring May’09)
3) Sep’07 offer (NY investors) – almost all of these 13.2 shares were bought up by Peggy and Ross, just in time for the NY investors to qualify for a 2008 US tax loss – December 31’08. We can make the link due to the $.75 warrants that were simultaneously purchased by Peggy and Ross, among other reasons.
4) Dec. 24’07 offer (4,297,572 Flow-through shares) – 13 placees
5) Mar. 27’08 offer (5,773,571 shares, comprising of 3.1M $.25 FT, 1.4M $.35 FT and 1.3M $.23 regular unit offer) – 10 placees
As such, if the GMP sellers came on board via an equity offering then it will likely be either through offering #4 or #5. I think it is unlikely that both of those are owned by the same group or that they are coordinated in this selling effort – of the 3 or 4 finder’s group, only 1 were the same in both offers.
As a result, if GMP is from #4 then perhaps there are about 400K shares still to be sold (4.3M less 3.9M GMP sales thus far). If GMP is from #5 then maybe 1.9M shares are still to be sold (5.8M less 3.9M). With the 1.3M unit offer for #5, I think it maybe makes #5 more diversified – the 1.3M units may not belong to the flow-through holders. As such, GMP shares still to be sold may be considerably lower than the 1.9M (identified under this scenario).
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