Thursday, March 31, 2011
Read more: http://www.businessinsider.com/maxim-finskys-new-adventure--pulling-teeth-extracting-value-from-the-tiger-2011-3#ixzz1IDH5j1Vd
By John Helmer, Moscow
Are they real teeth in the tiger’s mouth, or are they falsies?
This is the question which shareholders of two Canadian-listed junior goldmining companies have been asking since the two companies, both apparently controlled by Russian mining entrepreneur Maxim Finsky (image), proposed an all-share merger on the basis of valuation of assets buried in the wilds of eastern Siberia.
On March 14, here is what White Tiger Gold (WTG:CN)) and Century Mining (CMM:CN), both Toronto Stock Exchange listed, said they have agreed to do: “Under the terms of the Business Combination, shareholders of Century will receive 0.40 of a White Tiger common share for each common share of Century held. The board of directors of each company has unanimously approved the Business Combination.” A break-fee penalty of C$13.5 million was accepted by Century if its board opts for a better deal; or if Deutsche Bank London refuses to accept the deal. Deutsche Bank is the principal financier of Century’s operations through a US$33 million advance to buy Century’s future gold production.
Press reports of the merger deal claimed its combined value was C$743 million, based on the share trading for the two stocks. At the time of the announcement, WTG’s 114 million shares had a total market capitalization of $371 million. The week before the deal announcement, WTG was at $485 million, before selling ahead of the merger cut $114 million off its value.
WTG’s THREE-MONTH SHARE PRICE TRAJECTORY
Century Mining has 408 million shares on issue; on March 14, the WTG offer fixed its value at C$273 million. Just a few days earlier, its share price was much higher, and its market cap $306 million. The combination took $33 million off CMM’s value, adding up to a combined loss of market value of $147 million.
CMM’S THREE-MONTH SHARE PRICE TRAJECTORY
The market apparently doubted that WTG was the bigger of the two miners, so the collapse of both share prices ended up bringing the two closer together. Still, WTG remained with the higher value. Asked who provided the expertise to calculate this during the merger negotiations, Cowley of WTG said “[the valuation ratio] was agreed by independent committees of both companies. [They] are a group of people not in the public domain.” He added that the committees were advised by Moelis & Company of New York and Blair Franklin of Toronto. Moelis reports that last year it won The Banker Magazine’s award for “most innovative boutique”. Blair Franklin reports its motto as “At all times our primary interest is: What is in our client’s best interest?”
At Blair Franklin, Ben Mandell has been identified as the advisor to Century Mining for the merger deal. He has yet to respond to the question of how he calculated the valuation ratio for the share swap.
The facts on the ground look a little different from the announced valuations According to the only documented valuation WTG has so far presented publicly, a technical report by the Micon consultancy known in Canadian parlance as NI43-101, WTG’s only operational mine, Savkino in the Trans-Baikal region, started this year with 125,471 oz of gold reserves. By the year 2017, when mine life will be over, Micon reports it will be capable of producing a cumulative total 103,266 oz, at an average cash cost of $678 per oz, generate free cashflow of $9.1 million. Net income over the entire project, according to Micon, would be just $6.9 million.
Micon’s calculations are based on projective modelling of data from this survey map of the Savkino deposit:
Cross-Section of the Savkino mine, Ildikangold Block Model, NI-43-101 page 61
The Micon analysis, dated November 22 and posted on the Canadian market repository website SEDAR on December 29, says this mine produced 7,507 oz in 2009; 24,434 oz in 2010. It is possible Micon’s estimate for production in 2010 was not realized, because WTG chief executive Geoffrey Cowley said this week he estimates his company’s production last year at “between 13,000 and 14,000 ounces.” This, he confirmed, was entirely from the Savkino mine.
In the same period, Century has reported producing 19,224 ozs at its San Juan, Peru, goldmine, and 14,419 ozs at its Lamaque, Quebec, making a total of 33,643 ozs, or at least 38% more than WTG; possibly two and a half times more. In 2012, Century claims to be targeting annual gold production of 130,000 oz for Lamaque and San Juan combined. By contrast, WTG’s best hope, according to Micon’s analysis, is for output of 22,184 oz, one-sixth the volume of Century.
In their reserves count, Century’s Lamaque claims proven and probable reserves of 1.14 million oz, grading at 4.56 grams per tonne, with a mine life of at least 11 years. Century’s San Juan mine claims 186,316 proven and probable reserves, grading 8.87 g/t, with a mine life of 7 years. Savkino can do no better than a reserves count at present of 125,471 oz, grading 1.29 g/t, and a mine life of 7 years. On these indicators, WTG is about ten times smaller than Century.
The financial reports of Century, issued quarterly, indicate that in the nine months to September 30 last, gold sale revenues came to $16.2 million; costs of production were $10.8 million, and there was an operating profit of $5.4 million, before the bottom-line, after depreciation, tax, and other charges, turned into a net loss of $4 million.
WTG hasn’t issued financial reports yet, because the company did not come into existence in its present form until last December. More of how that happened shortly. The first financial report from WTG has been promised by CEO Cowley for this week. All that has appeared so far are notices indicating that earlier in March, WTG changed its auditor and appointed KPMG.
WTG’s predecessor company, SL Resources, also listed in Toronto, reported that as of September 30 last, it held cash of $27,370 and had liabilities of $49,032. Financially, it was dwarfed by Century Mining, and was not a mine-operating company at all.
WTG reversed into SL Resources in December within days of a Russian company called LLC UK Dalsvetmet (DZM — never mind the name, it is registered in Russia) agreeing to move SL Resources from Canadian registration to the British Virgin Islands, changing its name to WTG, and merging by reverse takeover with Dalsvetmet. On December 16, from an office in Tortola, WTG announced it had obtained conditional approval to sell shares in Toronto. From the negligible assets which SL Resources held, WTG now claimed the underlying value of “four wholly-owned subsidiaries of DZM and DZM’s entire 80% interest in a fifth subsidiary.”
These subsidiaries are licence holders for the Savkino mine and gold prospecting licences elsewhere in the Russian Fareast. A search of the Russian press and internet archives for these subsidiaries and their licence areas indicates rich promises, poor results. In 2008, at the time the first gold was poured at Savkino, the company claimed it would be producing 850 kgs (27,328 oz) of gold in 2009. The actual result, according to Micon, was less than half. The company also claimed reserves amounting to 190,000 oz. When Micon reviewed the data, it could not find one in five of those ounces.
In October of 2009, Dalsvetmet said it would produce almost 13,000 oz that year; according to Micon, it fell short and produced just 12,255 oz. In 2010, the company forecast production of more than 32,000 oz – the actual outcome was less than half as much. The gold reserve claim, counting Savkino and other exploration prospects, added up to 870,000 oz, according to the published claims.
In November of 2009, Finsky identified himself as the owner of Dalsvetmet and told Vedomosti, a Moscow business newspaper, that he intended to sell shares of his company in a Hong Kong or Shanghai Stock Exchange listing. He said “offers from Chinese investors to purchase shares are received continuously”, totaling, he claimed, $150 million. He also claimed that his partners were two Canadians, Fran Scola and Margaret Kent. Scola appears as a member of the Century Mining board which voted for the WTG merger. Kent was chief executive of Century Mining until she was replaced in July of 2010 by Daniel Major.
Richard Meschke, vice president for legal and corporate development at Century, said today that Finsky is the controlling shareholder of the company with a stake of about 30%, which he started accumulating in 2009. Finsky himself claimed in his November 2009 newspaper interview that he owned 40% of the company, with Scola and Kent owning the rest. The China stock sale never materialized.
Instead of raising the interest of Chinese investors, Finsky has raised the ire of minority shareholders of Century Mining. They charge that he used his power at Century to encourage the market to cut the share price ahead of the mid-March merger deal, and thereby favour WTG in the share swap, while retaining control of the expanded company. Cowley was asked to comment. “I am not prepared to respond to criticism by Century Mining shareholders. They will have their shareholders’meeting on May 12. Presumably, they will have an opportunity to discuss [these questions].”
But what is WTG worth? In Russian practice, mining companies are obliged to submit their reserves and resources counts to the State Reserves Committee and Rosnedra, the state mine licensing agency. Cowley was asked whether WTG had done this, and if so, what are the officially authorized reserve counts for Savkino and the prospecting areas, if any. Cowley said he wasn’t sure. “I have to check. I’m sure we do.” Asked what the proven and probable reserves are for Savkino, he said: “I don’t have [them] in front of me.” He claimed the full data were issued in the Micon report of December 29 posted on SEDAR. The report dopes not refer to official Russian state reserve estimates.
The State Reserves Committee declines to answer press questions. Rosnedra was asked to say whether Savkino had applied for and been granted an official reserve figure. The agency did not reply.
Cowley explained that when WTG’s shares were offered for sale in their debut listing on December 31 on the Toronto exchange, “a very small amount of retail shares” were sold. There was no prospectus for the sale, he added, “because it was a private placement”. What he means is that between converting SL Resources and Dalsvetmet into WTG, and the share sale of December 31, Finsky arranged for WTG to sell 24.8 million shares for a total of $24.8 million to what a company release called “various international investors”.
Wth this sale of 22% of the total issue, a share price was fixed of $1. Since the company has reported that Finsky owned 85 million of the shares (74%), that appears to have left just 4 million for sale on the stock exchange – just 4%. Who ran up the share price to buy these shares, Cowley was asked . He said he doesn’t know; the company has announced it knows of no material circumstances warranting the share price movement. Cowley acknowledged only that Finsky is the controlling shareholder, and that the investors in the private placement “are locked in until April 30.”
Finsky has a controversial reputation in the Russian mining industry. Reportedly a friend since childhood of Mikhail Prokhorov, he worked for him at Norilsk Nickel and was employed to buy gold assets which were later spun off into a separate mining concern, Polyus Gold. An executive at another Russian mining group says Finsky over-paid for the assets; in at least one case, Lenzoloto, more than $100 million of initial outlay was written off the Polyus Gold books a year after the acquisition.
During Prokhorov’s fight to oust former partner Vladimir Potanin from Polyus Gold in 2008, Finsky headed a further spinoff company called Intergeo. Potanin’s group charged this was improperly spiriting assets out of Polyus Gold.
From an initial price of US$26 cents per share at the merger of Dalsvetmet with SL Resources on November 11, just before the combination took the name of WTG, Finsky saw the price jump to $1 in the private placement of mid-December, and then to $6.67 in the first week of January, 2011. Cowley admitted that very few shares were actually traded. “We had no control and we had no significant idea of why the price shot up.” One analyst has reported that “given that Mr. Finsky owns on the order of 74% of White Tiger Gold shares, I would argue that a fair market price for White Tiger Gold does not exist.”
Finsky, who maintains a Moscow office as chief executive of Intergeo and a seat on the Polyus Gold board of directors, did not respond to a request for his comment.
Read more: http://www.businessinsider.com/maxim-finskys-new-adventure--pulling-teeth-extracting-value-from-the-tiger-2011-3#ixzz1IDGDSGoF
Fore those that still believe that their is no concerted effort by others outside of our real shareholders group to influence our decision, please read below a small sample of posts from members on the Agoracom board, who have also been outed as having multiple aliases as those that were found here on our board earlier.
Post from “Brattymack” on the Agoracom Blog.
Today I'm seriously contemplating what motivates someone to post under 4 different aliases and have a conversation with themselves.
I strongly urge you to stop posting Chickyboom/Holdout/KBrassard/TraderJoey and/or log in to Agoracom another half dozen times.
IP Check Results
Votes: 32 Score: 3.3
Mail Room (144)
Votes: 15 Score: 3.0
Mail Room (48)
Votes: 3 Score: 3.6
Mail Room (56)
Votes: 10 Score: 2.8
Listed above are all users who have last logged in from the same IP address as the message poster.
Post/Response from “Yikes” on the Agoracom Blog.
3 of 4 are on the dissenting list too...Good catch Brattymack
Post/Response from “Balducci” on the Agoracom Blog.
"3 of 4 are on the dissenting list too...Good catch Brattymack"Plus
dissenter"market chicky" which sounds close enough to "Chickyboom" to make one wonder. And 2 "Joey"s listed, in addition to TraderJoey. All in all, a good 800,000 or so share votes on the dissent list thrown into question.
Sort of makes one wonder how large the dissent community really is, doesn't it?
Post/Response from Brattymack on the Agoracom Blog.
You're good for 5 users, Balduch. What's the deal here folks?
IP Check Results
Votes: 40 Score: 2.9
Mail Room (20)
Votes: 2 Score: 2.0
Mail Room (13)
Mail Room (57)
Votes: 8 Score: 3.3
Mail Room (18)
Listed above are all users who have last logged in from the same IP address as the message poster.
A quick note to the BCSC alerting them of the inclusive/exclusive clarity problem should be enough to get them to send a question to WTG for clarification. Not a big deal but important enough to have an amended NI43-101 report issued. Since the presentation is potentially confusing and since there is take over in the works, maybe it is a big deal.
The second problem that you could alert the BCSC about is the business of the Pridneprov property and the lack of a NI43-101 compliant disclosure. Read what I've posted at the blog. I've though about it and even though the WTG statement has a caution, there is enough bait in their statement that IMO should trigger the BCSC requesting a supporting NI43-101 compliant disclosure. For example, where is the property located? What is the ownership? What is the geology? These are all things that must be answered in a NI43-101 compliant technical report. The fact that there aren't any resources doesn't matter. The BCSC may or may not be interested but if you file a question with them they will give it consideration. Without more information it is hard to know if Pridneprov is anything more than a big moose pasture.
Since WTG trades on the TSX and since CMM has a strong connection to BC I expect the BCSC wouldn't have problems taking the complaint. Alternatively you could file with the OSC (Ontario Security Commission). Send it to one and copy the other is probably the best strategy.
The issue with the Pridneprov property could be enough to trigger a cease trading order. IMO WTG should definitely not be trading right now. But that is just my opinion. The BCSC and OSC aren't necessarily easy to predict and may see things differently. However if you do complain they will consider the merit of your complaint.
Wednesday, March 30, 2011
To clear up a bit of misinformation about Finskiy not exercising warrants to provide working capital per the Shareholder's Agreement, he did in fact exercise almost 23 million warrants (less than half) to provide almost $7 million in working capital from July to September 2010. Most were exercised in July and August with 1 million exercised on Sept 7 and 1,9333,333 on Sept 10. It was almost as if if he were out of money to exercise any more, otherwise why bother with such small amounts at the end. He could have done what everyone else with warrants does, and that is sell shares to raise cash to exercise warrants, but he didn't want to reduce his CMM holdings.
After telling the BOD he was tapped out, on Sept. 16 Century announces its first PP for $5 million. You'd think that if Finskiy had any spare cash he'd want to participate rather than see his share of the company go down with dilution to others. He had the right of first refusal on any PP. Several more PP's followed in the following months and Finskiy couldn't be too happy about that. He probably believed Peggy when she said the company was fully funded, but that was based on meeting performance benchmarks to get more funds released from Deutshe Bank.
So he approaches his pal Prokhorov, one of the richest guys in the world to front him enough money to create a shell company, inflate its share price and use the shares as currency to takeover Century. This led to the creation of White Tiger Gold. The loan from Prokhorov only needed to be about $24 million (85 million shares @$0.28). He then convinced a group of "international (read Russian) investors" to buy 24 million shares @ $1.00 (working capital to get a TSX listing).
On February 2, he repays his debt by transferring 25 million shares and 25.5 million warrants to Prokhorov in a Sedar transaction described as 97-Other.
Plausible or completely off the wall?
Based On The Current NI 43-101 Resource Disclosures...
CMM @ $3.41 per share.
WTG @ $0.32 to $0.93 per share.
That said does WTG really have a value attached to it? Perhaps not, read this:
Given that Mr. Friskiy owns on the order of 74% of White Tiger Gold shares (see report for references), I would argue that a fair market price for White Tiger Gold does not exist.
Hopefully this will further help CMM shareholders make a decision in regards to this merger. Currently my decision stands at a firm NO to this merger. It's clear CMM is worth a lot more than WTG and therefore giving away our CMM shares for 0.40 WTG shares is an insult to our intelligence IMHO.
Tuesday, March 29, 2011
Unlike most of you on Stockhouse/Igloo, I don’t believe Finskiy is out to screw us. Yes, he used the broken crusher to drive our share prices down. And yes, he didn’t honour his agreement to fund our working capital through the exercise of his warrants. But please understand that if Finskiy wants to steal us for pennies, he could’ve created a huge negative catalyst (not a weak one like a broken crusher) and stolen us for nothing. Heck, he even grew a conscience and offered us 0.4:1 rather than the 0.2:1 that we expected (yes, I know, WTG is still garbage so it’s easy to be generous giving away garbage). Finskiy’s targeting TSX listed companies for a reason… he likes to do business here. Isn’t it a little too early for him to ruin his reputation, with so little money on the line thus far? Given the broken crusher incident, I will never fully trust Finskiy. However, I don’t believe Finskiy is trying to screw us. Furthermore, I think Finskiy is a savvy businessman who is flexible to change when things don’t go according to plan.
Our main concerns with this offer is the fact that we are not getting paid enough and that WTG is a BVI incorporated company, which does not protect minority shareholders the same way Canadian companies do. Finskiy’s main concern is he wants to buy CMM but is either unwilling or unable to offer us the right price.
One way to resolve all the issues listed above is to get WTG to do a private placement to raise cash so that the offer is at least partly in cash. The private placement would either involve institutional money which would be great to look out for minority shareholders, or it would involve money from Prokhorov/Polyus. Either way, if we get paid out $0.50 in cash and 0.3:1 in stock, I think there will be a lot more support for the offer. This will be great for Finskiy as well, since he could get CMM into WTG and doesn’t have to personally pay cash doing it.
One final point I’d like to make is that I don’t believe Finskiy is averse to a white knight bid. Finskiy has put in a lot of work and money here just to get an extra 15% of CMM. If CMM is worth $500mm, 15% of that is $75mm. This is not that much money considering a white knight could come in with a bid of $600mm (or $1.30/share), and value his 40% stake at $240mm (I assume it’s still a 40% stake because I find it hard to believe that he actually disposed of his warrants to an arms length party). If armed with $240mm in cash, Finskiy could do wonders with WTG, and might even eventually get to 1 million oz annual production. Finskiy was willing to sell out of his Etruscan stake before, so why would he not sell out of CMM now? Time to find a white knight!
If any of you that have voted shares in the Table of Dissenting Shareholders have added to or decreased your holdings, then may I suggest that you add another entry at the bottom of the table. Use the same nickname and record a positive or negative number. In the First Name column enter *Amended*.
Your original share count will be adjusted accordingly.
I've just sent out invitations to Uall, nt300, traderjoey and bigrattler to join up so that when you comment the comment is posted instantly. That is one of the benefits of blog membership, but a blog member can start their own thread.
To others that post frequently like PayDay, please send me an email at email@example.com so that I can send you an invitation. I don't see your name on the table of dissenting voters.
Re the discussion of poll numbers vs dissenting shareholders, I believe the latter will always be a lower number for a number of reasons. If you log into the blog from more than one computer you can vote from each of them and if you clear cookies you can vote multiple times, so polls are only an indicator and not all that scientific.
On the other hand, to record your shares for the NO vote you have to provide an email address; this will discourage some people that might think it is an invasion of privacy. So I think the actual NO vote is understated. The request for email is there in case there is an effort to validate the entries, and will therefore discourage false entries.
Monday, March 28, 2011
Sunday, March 27, 2011
These veins are narrow and flat. I believe they pinch in spots and swell in other spots as well, in likely a somewhat unpredictable manner - I think. On the Lamaque property, flat veins are also very continuous - most of them are very continuous and some of them even extend up to 1 or 2 km. I think all of these factors make these veins difficult to drill extensively in advance. It would be extremely expensive to drill sufficient number of holes to qualify for 43-101 status. Benefits of such efforts likely do not warrant the up front costs. It is likely better to inject the capital into mining the continuous flat stopes, especially since the area represents only 1 of 3 mining zones of the current / near-future mine plan.
As mentioned before, I believe the company has been saving the higher grade reserve ounces in the flats. This is partly due the continuous nature of the current veins being mined, coupled with it being more expensive to open up new mining stopes. The extra ounces we get from the existing open stopes are at lower grades relative to what the reserves in new stopes can provide, but the high $1,425 now and the future $1,500 - $2,000 gold price provides incentive to go after these ounces, especially if the company is able to eventually use the higher grade Bedard Dyke and North Wall ounces to better balance the overall grade of the Lamaque operation.
There are other gold properties / companies around the world with this type of up front drilling challenge for 43-101 resource calculation purposes. For example, Dynacor Gold has a small operating plant in Peru, but they have never ever drilled any holes on their extensive (good potential) gold property in Peru (about 20 - 25 km from Century`s San Juan Mine). Dynacor Gold does not show any 43-101 resource for that property. They use the milling operation to process ore from small miners in the area (they purchase the ore at a high price which minimizes their margins, but they also incur no capital for exploration, mine development and mining). I think they show current run rate production of about 30,000 oz of gold, annualized. The small miners mine the ore from various properties within the region, but I believe they also mine ore from Dynacor`s property (the one that has never been drilled and has no 43-101 resource). I think Dynacor is planning to expand the milling facility to 50,000 oz capability (all from small miners still - Dynacor still has no plans on drilling this property, yet the property and similar nearby properties seem to deliver plenty of ounces to them).
As such, when one uses the official 43-101 resource report for Lamaque, one should remember that not only does it exclude any resources drilled at the Bedard Dyke (should eventually be included once the Russians get around to it) but it will always likely exclude much of the gold sitting in the Lamaque Flats.
Saturday, March 26, 2011
Our No Vote seems to have stalled at around 78 million, but there are no institutional holders in there. I'd imagine those are the ones getting calls from WTG appealing for their vote. The only ones that I can imagine voting for this merger are those directly associated with Finskiy and anyone that holds WTG shares. If I owned WTG shares, I’d be buying CMM now as a hedge, because if the merger fails, WTG is going down and CMM is going up. I see at least one poster on Stockhouse pumping the merger because he also posts on the WTG board.
If we play our cards right, there is no way for the merger to pass. If we have less than 100 million recorded No votes, then our Plan B has to be that we all register as Dissent Shareholders en masse. The limit is 5% of Century shares = 20.4 million or 23.5 million of a fully diluted basis - otherwise that is a condition for the merger to be approved. The 5% limit is there because WTG doesn’t have enough cash to pay out more than that. 78 million Dissent shareholders kills the deal. It doesn’t matter how much money Finskiy and his Russian associates have, it is WTG that is making the bid, and WTG only has about $16 million and a $24 million line of credit. And if they could pay out 40 million shares, that would leave nothing to finance CMM operations – the whole selling point for the merger.
As this becomes more and more apparent to Finskiy and associates, they have two choices – withdraw the offer or sweeten it. There won’t be a cash component because WTG doesn’t have enough cash so it can only be more paper. 1:1 might have a chance, but anything less probably won’t have a chance.
As much as I despise the tactics used to steal our company, I admit I’d have to consider a 1:1 offer. If we don’t have enough No votes to defeat the current offer, then we are going to have to live with Finiskiy and associates. Major will stay as CEO and I believe he can do a good job for us once the merger is quashed. Remember he has 3 million options which can easily be worth $3 million within a year. There has to be a reconciliation between the Finskiy group and minority shareholders if the merger fails.
The ideal situation would be to show that we have an absolute majority of No votes including Finskiy shares. Then we’d have the power to make changes in the BOD where Finskiy would no longer have control.
Friday, March 25, 2011
Good day all:
In order to access the individual Q&A's of the March 15 Conference Call here are the YouTube links. Copy and Paste each link.
Q&A 1, T.K., Value of CMM after combination
Q&A 2,L.G., When can we expect an updated N43-101...
Q&A 3,G.E., How was the .4 ratio determined?
Q&A 4,B.H., How was WTG valued at $4.50
Q&A 5, J C ,Why should WTG property be of value to CMM
Geoff Cowley C E O , WTG also responds to Question 5
Q&A 6, D.L.,Finskiy's ownership, bridge loan
From Jan.12/10 CC, Peggy Kent comments on Shareholder Agreement.
Note: on checking the # of YouTube views, there were 133 views as compared to 30 aver. for the questions.
I would also suggest that members go back and listen to the Jan. 12, 2010 CC and then ask yourselves..... what happened to our company... and then 6 months later they stabbed Peggy Kent in the back.
Q&A 7,C.J. Use of Portable Crusher
Q&A 8,C.H.,Why are we not being offered a cash price
Q&A Contd, Geoff Cowley additional comment
Q&A 9,J.C., for support improve the offer
Q&A 10, B.H.liquidity of WTG paper
Q&A 11, D.L., Why the Emergency Loan
Q&A 12, B.G. financial impact of crusher failer
Q&A 13,B.M. When did WTG first approach CMM+breakup fee, why
Q&A 14, C.R., Dissatisfied with offer
Q&A 15, L.G. Who was on Fairness Committee + qualifications
Q&A 16,L.H. question to Cowley 28 to X15 for WTG
Q&A 17, B.P. Why didn't Mr Finskiy inject more cash
Wednesday, March 23, 2011
Century has now received, in aggregate, US$3,300,000 of the total US$4,000,000 commitment under the first and second Bridge Loans. The second Bridge Loan was agreed to concurrently with the execution of the Arrangement Agreement in respect of the proposed business combination of Century and White Tiger (the "Business Combination") as announced on March 14, 2011. The interest rate under the Bridge Loans is 10% per annum, and the Bridge Loans mature on the earlier of the effective date of the Business Combination and the termination of the Arrangement Agreement in accordance with its terms.
Mr. Daniel Major, President and CEO of Century stated, "The bridge loans from White Tiger have aided Century in meeting our financial obligations and helped continue funding the Lamaque production ramp-up, and will offset some of the losses from the crusher failure and permitting delays we have recently experienced."
About Century Mining Corporation
Century Mining Corporation is a Canadian gold producer and holds strategic land positions in Canada, the United States and Peru. The Company's strategy is to grow to its gold production through existing mine expansions and acquisitions of other strategic and synergistic gold opportunities.
On behalf of Century Mining Corporation,
Daniel J. Major, President & CEO
22 March, 2011 06:57:00
IRJ – March 22 – Gold could rise to US$1,600 an ounce by the end of next year, the CEO of AngloGold Ashanti is predicting.
“We think the direction for gold looks like it could continue to be quite strong on the upside,” Mark Cutifani told Reuters in London today. “You could say we should breach $1,500 next year and we use (an increase of) about $100 an ounce a year on the supply side to give a sense of where the market goes over the long term.”
Those numbers are a bit of a stretch from gold's current price, just a bit above $1,400 an ounce. But Cutifani, a veteran with experience in the gold mining industry going back to 1976, didn't mince words.
“Basically I'm saying towards the end of next year, we should hit $1,600 based on those numbers,” he said.
The world's third-largest gold producer, AngloGold (NYSE: AU) posted adjusted headline earnings of $787 million for fiscal 2010, the company announced last month.
Outside of its key domestic operations, Johannesburg, South Africa-based AngloGold has operations in Ghana, Guinea, Mali, Namibia and Tanzania, and off the continent in North and South America and Australia.
Tuesday, March 22, 2011
The CEOs of two top gold miners both see gold continuing its rising path this year, and in the years ahead possibly reaching $1750 or higher in 2012.
Author: Carole Vaporean
Posted: Monday , 21 Mar 2011
NEW YORK (Reuters) -
U.S. gold miner Newmont Mining Corp (NEM.N) and Canada's Agnico-Eagle Mines (AEM.TO) said on Monday they expect increasing demand for gold as a monetary asset to send the price up to levels of $1,500 to $1,600 an ounce in the next 12 months.
Speaking in exclusive interviews at the Reuters Global Mining and Steel Summit, the companies' chief executives cited gold's use as a proxy currency, central bank gold purchases, rising demand from Chinese and Indian buyers, and an affinity for gold as an investment in developed economies as chief drivers leading the metal to $1,750 or even $2,000 an ounce in the next few years.
"If you had said 10 years ago that gold was going to be at $2,000, everyone would have agreed that the world would be in a total shambles and there would be chaos in the streets," said Agnico-Eagle Chief Executive Sean Boyd.
"You could see gold at $2,000 and you could see the world function the way it's functioning right now. And, I don't think that's a stretch," he added.
Unless governments take steps to stave off growing inflationary trends, Richard O'Brien, president and CEO of Newmont, the world's second largest gold miner, said gold's value as a protection against inflation could lead it to $1,750 an ounce or higher in several years, possibly by 2012.
"It just depends on how well governments respond to inflation, on whether there are counteracting activities that governments take to forestall the rise in inflation," he said.
O'Brien said, he thinks the pace of inflation is already picking up with governments increasing their currency balances over the last few years and higher food and fuel prices. It will only increase as construction of infrastructure picks up.
Historically, he said, governments have not been able to control inflation, so gold will be used as protection.
For 2011, the CEO of the Denver-based miner said he thinks volatility spawned by global currency movements and political turmoil in the Middle East will mean gold will trade in a range of $1,350 to $1,500 an ounce.
Agnico's Boyd said a gold price at $1,600 an ounce in the next 12 months would "not be a stretch," given its demand as a monetary asset, its desirability as an investment in developed countries, and jewelry purchases in China and India.
The higher gold price would mean silver could surge to $40 to $50 an ounce, he said, "And I don't think that's wild."
"We saw for the first time (in recent history) net central bank buying last year. I think that's going to continue."
On Monday, spot gold was higher around $1,427 an ounce, slightly off the record high of $1,444.40 set March 7.
Despite record gold prices motivating some miners to expand their capacity, O'Brien said the limited life of existing mines, as well as lack of accessible new sites and the extended time it takes a new discovery to go into production, would assure that new supply will have little impact on price gains.
Both chief executives said they do not hedge any top-line assets like gold, silver or copper. They added, however, that they do hedge some input costs, like oil and the Canadian dollar in the case of Agnico-Eagle.
Newmont sometimes uses hedging to lock in energy costs, or hedges the Australian dollar and other currencies in countries where it operates.
(Additional reporting by Frank Tang in New York; editing by Rob Wilson)
Monday, March 21, 2011
Century has received and delivered to White Tiger the consent of Deutsche Bank AG, London Branch to, among other things, the Business Combination, as required under the Arrangement Agreement (the DB Consent"). Provision of the DB Consent satisfies one of the conditions to closing of the Business Combination.
Mr. Daniel Major, President and CEO of Century commented, "We are very pleased that Deutsche Bank has consented to the combination of Century and White Tiger. Deutsche Bank has been very supportive of Century since we entered into the prepaid forward gold purchase financing at the end of 2009, and we look forward to a cooperative relationship as the Century and White Tiger combination continues to fulfill our obligations to Deutsche Bank."
For further details on the Business Combination and the Arrangement Agreement, including the remaining conditions to closing, please see Century's and White Tiger's joint press release dated March 14, 2011.
About Century Mining Corporation
Century Mining Corporation is a Canadian gold producer and holds strategic land positions in Canada, the United States and Peru. The Company's strategy is to grow to its gold production through existing mine expansions and acquisitions of other strategic and synergistic gold opportunities.
On behalf of Century Mining Corporation,
Daniel J. Major,
President & CEO
The strategy that has worked in the past to defeat this nonsense is two folds. First, collectively we need to realize this is like ‘The Wizard of Oz’ the man behind the curtain needs to be exposed for what he is. Second, to defeat the frontal assault in front of us now, we need to make it very costly for WTG and the greedy people behind WTG. Here are some ideas:
- Vote a BIG NO on the merger.
- Get the word out to the Mining Community to NOT do business with these crooks. They need to be globally ostracized. This is a potential cancer growing on the TXV, as well as, small mining in general. The Modus Operandi, MO, only works where they have economic muscle perceived to be superior to the competition i.e. small mining. However, with more victims, like Century, if we rollover, they could threaten the entire mining industry.
- Bring down the wrath of any relevant Regulatory Agency. If nothing else, it will up the money ante of what they will ultimately have to pay.
- Any litigation that goes after WTG or even better yet the real people behind the curtain will make it costlier and force them to question the wisdom of this thievery strategy.
- Even if we loose our NO Merger Campaign, we need to take the fight to the BOD demanding resignations from all.
- Any light that can shined on these cockroaches and their activities will be helpful. They tend to scurry when the lights go on.
- Learn from the wolf and attach as a pack. We have a lot of excellent resources here.
- If WTG wants the metaphor of ‘scorched earth’ let’s make sure the WTG Merger dies of 'smoke inhalation' first'.
Sunday, March 20, 2011
Please note that I am not making accusations here. I do not have sufficient legal knowledge to make legal accusations. I am posting info I have gathered on the internet while researching this current business combination situation. I have posted sources and/or links with regards to the info.
I am, however, sharing with readers of the blog that I am left confused with regards to certain aspects surrounding this business combination. I am left without answers to 3 key questions, as follows:
1) Scola did not resign from the BoD until March 9th. It meant that the Finskiy-Scola ``Investor`` side had a 3 to 2 BoD advantage (including the CEO, who is suppose to be the company`s day to day leader) during the periods when key Century Mining decisions were being made, including bridge loan decisions and during periods when the CMM and WTG business combination deal was being negotiated / discussed / explored / entertained / structured. How does this unbalanced BoD situation not compromise the fairness of the process?
2) With Daniel Major`s level of interconnectiveness to many related party players, is he in a position to look out for the best interest of all Century Mining shareholders, as its CEO and day to day leader? This appears to be an especially compromising situation when one considers that the BoD was unbalanced when key operating and business decisions were made, prior to March 9th (as highlighted above).
EDIT: Another concern I have is that Mr. Major was selected for the CEO position by an unbalanced BoD - Finskiy-Scola ``Investor`` side included Hulley, Scola and Lamarque during the interviewing and selection process. January 4, 2011 NR: `` Concurrently with Mr. Major's appointment, Mr. Keith Hulley will step down from the position of Interim CEO and also leave the Board of Century Mining to enjoy his retirement.``
3) How does the value of SLR/WTG go from what appears to be a calculated value of $22.5 million (calculated by myself using the $.25 announced financing on that date) on November 16, 2010 to a $424 million market cap company on March 20, 2011? As noted below, there was the $24M financing and the $23.6M revolving credit security agreement during the period in between those 2 dates. I do not see any other material financing transactions or property acquisitions or major mineral discoveries that one would normally associate as significant (overwhelming) market cap drivers.
EDIT: In all fairness, closing of the reverse takeover between SLR and Finskiy`s Russian company would have moved the combined company`s share price from $.25. That was likely key in justifying the move up to $1.00. At least, I can accept that explanation. It is the larger movement I am struggling with.
Again, I am just sharing (with blog readers) 3 unanswered questions I have with regards to this business combination - nothing more, nothing less. One should draw his/her own conclusions about the situation.
Uneven BoD when key operational and business decisions were made:
From Century Mining`s March 14, 2011 NR: ``Century wishes to also announce that Francis Scola resigned from the Century board of directors effective March 9, 2011.``
From Century`s website (March 20, 2011, 9 pm Eastern time): ``Mr. Major recently held the position of Chief Operating Officer of Ecometals Limited since 2008. Mr. Major has retained his roles as Non-Exec Chairman of Ecometals Limited, and also is a director of Zaruma Resources Inc. ``
Ecometals BoD includes Major, Lamarque, Scola and Hulley. Two of the 4 are currently on Century`s BoD. Scola was up until March 9th. Hulley was the Interim CEO and BoD member up until about 2.5 months ago.
Christophe Charlier is on Ecometals BoD. He is not on Century`s BoD, but he is on the Onexim Group BoD with Prokhorov. ``Mr. Finskiy is Chief Executive Officer of LLC Intergeo Managing Company, the mining and exploration arm of the private Russian conglomerate Onexim Group.``
Zaruma Resources` Management Information Circular filed on SEDAR on December 3, 2010 (pg 13): ``The following information concerning the additional nominees of ZGM and Gravity to be elected or appointed to the Board of Directors following completion of the Financing Transactions (the “Proposed Nominees”) has been provided by each of them: Maxim V. Finskiy, Geoffrey P. Cowley, Francis H. Scola``
As stated above, Century Mining`s website has a note identifying Daniel Major as a director of Zaruma Resources Inc. This is the same company that has listed a SEDAR document with proposed BoD nominees of Finskiy, Cowley and Scola.
Mr. Cowley is currently the CEO of White Tiger Gold (WTG), and a BoD member. Mr. Finskiy and Mr. Scola are also on the BoD of WTG. Directors to be nominated for the WTG/SLR BoD can be found on the WTG`s Management Information Circular filed on SEDAR on November 12, 2010 (pg 5).
White Tiger Gold:
November 11, 2010 NR: ``exchange for the issuance by SLR of 85,000,000 common shares (each, an “SLR Share”) to DZM``
Finskiy or related parties received 85M shares for the sale.
November 16, 2010 NR: ``Immediately before completion of the private placement, the Corporation had 3,000,000 common shares issued and outstanding. As a result of the issuance of 1,800,000 common shares pursuant to the private placement, the Corporation now has 4,800,000 common shares issued and outstanding. The common shares issued on the private placement are subject to a four-month hold period.``
``SL Resources announces the completion of the sale of 1,800,000 common shares at US$0.25 per share to arm’s length subscribers for gross proceeds of US$450,000 pursuant to a nonbrokered private placement.``
Using the $.25 share price, SLR/WTG would be valued at $22.5 million ((85M + 4.8M shares) * $.25) on November 16, 2010.
Today, March 20, 2011, White Tiger Gold shows a market cap of $424 million on the TSX. There appears to be only 2 additional material financing or property acquisition or major mineral discovery announcements since November 16, 2010, as follows:
1) December 29, 2010 (Completion date) - $24.8M financing.
2) March 2, 2011 – Revolving credit security agreement of $23.6M.
There does not appear to be any info on the December 29th news release that would suggest the $24.8M financing includes a hold period. Also, there does not appear to be any info on this subject matter included on any previous news releases or subsequent news releases.
However, it was stated by the writer in a recent Globe & Mail article that those shares are currently locked up, and that it only takes one or two big WTG sellers to affect WTG`s stock price:
``However, only 10 per cent of White Tiger’s total outstanding shares are publicly traded, so even one or two big sellers can affect the stock price.``
``While White Tiger recently completed a private placement, those shares are locked up and can’t be traded.``
As a side note, a person named Edward Aryeh Sugar is listed on WTG`s SEDI insider listing page as holding 8.9 million WTG shares, priced at $1.00. The transaction dates were December 22nd and 23rd 2010. These shares were likely from the $24.8 million financing. As such, one needs to add the 85M and this 8.9M shares to arrive at the ``official`` insider total reported on SEDI. Mr. Sugar is listed as a code ``4-Director of Issuer`` on SEDI.
Every shareholder needs to carefully read the contents to understand how we arrived at our current situation - especially the events beginning on February 2.
Peggy had her critics and I'll admit I was one of them, but she did build in Century shareholder protections into the Shareholder Agreement with Finiskiy. There were two key and extremely important conditions in the agreement:
- Finiskiy would never have control over the Board of Directors. The BOD was to have 7 members of which 3 could be Finiskiy appointees. After the AGM on June 11, the BOD consisted of 6 directors - an even split between Finskiy and (for the purpose of this post I'll say) CMM. Less than 2 weeks later Peggy "resigns". IMO Peggy would never resign on her own, so one of the other two CMM directors had to vote her out - either Sheridan or Campoy. One month after Peggy's departure Campoy received an additinal grant of 200,000 options after receiving his annual quota of 250,000 options six weeks earlier.
- Finskiy was to provide up to $15 million in working capital on demand from the BOD through the exercise of his 49,375,000 warrants. He exercised less than half that number before moving 25,500,000 out of his direct holdings on February 2 so that he presumably couldn't be forced to exercise them. It is highly unlikely that the Finiskiy dominated BOD would force Finiskiy to do anything he didn't want to do anyway. Just 6 days later on February 8 and one day before the crusher breakdown, Century enters into a bridge loan agreement with WTG.
We shareholders should demand the resignation of our CMM directors for unanimously approving the Russian takeover of our company.
Friday, March 18, 2011
Thursday, March 17, 2011
I would also like to encourage those who opt to not become a member of this site to choose the 3rd option -- Name/URL-- instead of the 4th option --Anonymous-- when commenting. Leaving a nickname in the "Name" box will make it easier for everyone.
Thanks for all the kind words about the site!
There are probably a few other quirks with the site. I just haven't had time to address them. If there's anything glaring let me know.
Thanks for participating in list...spread the word.
More to come...
Typically, not 100% of shares get voted. Also, only voted shares will be counted.
408M CMM shares out - 113M common Finskiy-Scola shares (SEDI) = 295M shares
295M shares that can be voted in a ``Majority of Minority`` vote (before adjustments for any other possible related party shares and any exercise of warrants)
Finskiy needs the ``Majority of Minority`` vote to be 50% (plus 1 vote) for the Business Combination to be closed off.
If all 295M shares get voted (extremely unlikely) then we will need to gather 147.5M shares (plus 1) to guarantee a block.
Let`s say 240M shares get voted: We need to gather 120M shares (plus 1) to guarantee a block.
Let`s say 200M shares get voted: We need to gather 100M shares (plus 1) to guarantee a block.
Let`s say 160M shares get voted: We need to gather 80M shares (plus 1) to guarantee a block.
If 140M shares get voted: We are pretty much there with the block.
Again, we seem to have around 70M thus far (and counting).
Mr. Finskiy, Mr. Scola, Mr. Major, etc., as you can see, it is likely in the best interest of everyone if a much better offer be presented. I believe 83% of the people voted in the poll do not want anything to do with WTG. I believe that has a lot to do with how they feel they have been treated, especially with recent actions - there is plenty of anger right now. I believe you folks are in a position to improve the situation for the betterment of everyone (both sides). I think everyone, on every side, is interested in wrapping things up and moving forward in capitalizing on this once in a lifetime gold environment.
I haven't thrown my shares at the No yet, as I can't get my head around what may happen if No wins.
Can anyone answer the following?:
If a "no" goes through...
-When do we owe the loaned money back to WTG?
-If it is soon, where does CMM get the money from?
-I know not all believe the NR from March 8th, but they do say they are broke.
-The last PP was not filled, so can we really expect anything from the street?
-What happens if the Russians decide to walk away? They bought most @ .20 or so, so I'm sure anything .21 and over will work for them.
We are sitting around .55...never thought this would happen with a merger/takeover, but it is reality. If we vote no do we get to .20 before a buck? I like the thought of a better deal, or no deal and we keep milling our gold and make lots of money...but the picture doesn't seem too rosey, if you believe any words from management(truth or fiction is yet to be seen). I'm not saying vote yes, as I can't decide myself, but I can't help but think what a no may do if no other offer/white knight emerge.
This whole thing seems to be a bit of perfect timing for WTG, but what if it's because we're not going to make it on our own and we needed them as much as they need us?
Wednesday, March 16, 2011
You must enter an email address to record your shares, but like anyone who has emailed me to become a Blog Member, this information shall remain confidential. Of course we don't know yet of any foolproof way to validate the share ownership, but at least with an authentic email address, we have the option to contact the person.
I notice that the audio file of yesterday's conference call is now available on the Century Website at this location.
March 15 Conference Call
Over the last 48 hours I have received several calls and email messages from friends and industry peers, urging me to establish a presence on this site as well as the Century Mining Agoracom blog.
The timing and need to discuss action is unfortunately due to the fact that generally speaking, the minority shareholders appear to be in a position where our voice will not be heard without some formal organization efforts.
Simply put, at this moment I have been contacted directly or indirectly by holders of some 40-45 million shares. Although this in itself will not win the day, it represents a solid foundation on which to grow support.
As I am not the strongest in my computer/techie skills, as a result, and before venturing too far forward, I am soliciting suggestions as to how a dialogue can be established among shareholders in a manner that preserves personal identities(at least at the moment) while at the same time provides the people doing the work with the confidence that the numbers of shares that people claim to represent are indeed factual. We are poorly informed if we believe that at some point in time, some form of proof of share ownership won't be required, however that time is not now. We do however require a system of communication internally that gives the people doing the work some confidence that their efforts are protected and not in vain.
I have posted this note on Agoracom and I will monitor the responses to my request for communication suggestions.
Thank you for taking the time to read this posting.
"Fair For All"
Based on -ve NR's and merger annoucements, MM's/Arbitrageur(s) have established a price for CMM in the mid 50's. Pretty ugly. The fact of a major sell off of the world markets due to the Japanese Crisis ( thoughts and prayers go out to the Japanese people as a whole!!!) has hindered any normalacy in the CMM SP. If you think your shares are worth at least $ 1.20 as some are claiming then why is everybody gun shy at 55 cents???
Interesting times ahead!
Carib, could you post the trades today and continue to post when you can? Many thanks!
EDIT NOTE: I HAVE EDITED THIS POST TO REFLECT A PLAN OF ARRANGEMENT APPROACH. THEY ARE USING A PLAN OF ARRANGEMENT WHICH IS A 1 STEP PROCESS AS OPPOSE TO A 2 STEP PROCESS (ie. a takeover bid attempt first and then a plan of arrangement as a secondary stage effort). IT MEANS THAT WE CAN ONLY INFLUENCE THE OUTCOME BY VOTING. WE ALL NEED TO GIVE OUR VOICE BY VOTING!!! IT IS THE ONLY WAY TO INFLUENCE THE VOTE OUTCOME.
In a nutshell, to close off the Business Combination, I see them needing approval on 2 separate votes:
1) They need Century shareholders to vote for 66 2/3% in favour of the WTG combination. Now, Finskiy and related parties will be allowed to vote their shares in this one. However, given the massive public disapproval for this deal (also reflected in the share price), 66 2/3% will be a major challenge for Finskiy to achieve, even with his own shares included.
2) In addition, they also need the majority of (typically refers to as minority) Century votes to be 50% (plus 1 vote) in favour of the WTG combination. Now, if I recall correctly, Finskiy and certain related parties will NOT be allowed to vote their shares in this count. As I had suggested a while back, this may be why Finskiy appears to have reduced his shareholdings by 50.5 million (shares and warrants), per SEDI (via ``Other``), and potentially over to friends (but unproven at this point) - to allow those shares to vote as part of the majority of minority voting process (again, I am not accusing Finskiy of this, but I am just throwing this out as a possibility given that we don`t know what ``Other`` is intended to mean on SEDI).
Hence, the title of my post.
This is from the news release:
``Conditions to Closing``
``Closing of the Business Combination is subject to certain conditions including:``
* ``approval by a minimum of 66 2/3% of the votes cast by Century shareholders at a duly called special shareholders' meeting;``
* ``approval by a majority of the votes cast by Century shareholders at the special meeting, excluding those votes required to be excluded pursuant to applicable regulatory requirements ("majority of the minority" approval) under MI 61-101 (as defined below) and the rules of the TSX Venture Exchange (the "TSX-V");``
Tuesday, March 15, 2011
- Affinity Fraud
- Boiler Rooms
- Pump and Dump
- Exempt Securities Scams
- Forex Scam
- Investment seminar scam
- Offshore investment scam
- Retirement account scam
- Spam e-mail