Newstrike AGM Report
Newstrike AGM Report
17th February 2011
The meeting was well attended with all the directors, the CFO Salvador Miranda, and about 5 shareholders along with the scrutineer and a lawyer type or two.
Quorum was achieved with 10,235,000 shares represented between 26 shareholders in person or by proxy.
Everyone was welcoming and friendly and I had met everyone on the board with the exception of Ken Thorson. I am very impressed with each of the directors and the company as a whole.
The directors were elected as per the information circular namely Richard O’C Whittall, Kevin Rathburn, Ken Thorson, and Robert Withers.
The formal part meeting was led by Richard and was executed quickly.
Following the formal part of the meeting Richard led a discussion of the current status of the company. The recent financing has led to a very comfortable cash position of over 20 million dollars in the treasury. The financing was very well received and in fact demand exceeded the financing by about 7 million dollars with the books closing in only an hour! The full greenshoe was allotted for a total gross proceeds of $17.71 million.
There was no warrant attached to the financing and as a shareholder I commend and respect the board for keeping the dilution to a minimum. One of the buyers of the financing was Sun Valley Gold.
Sun Valley Gold LLC is a privately owned hedge fund sponsor. The firm primarily provides its services to pooled investment vehicles. It also caters to corporations. The firm invests in the public equity and hedging markets across the globe. It typically makes its investments in metal mining projects employing a quantitative analysis. The firm employs a fundamental analysis with a bottom-up stock picking approach to make its investments. It uses relative value long and short investing and a merger and convertible bond arbitrage strategy to make investments in private equity, and pre-public equity. Sun Valley Gold was founded in 1990 and is based in Ketchum, Idaho with an additional office in Vancouver, British Columbia.
There are currently 2 drills working on the property at a burn rate of about 250k per month each with a per meter cost of about $105. They are working on hole 32 on an expanded program of 8000 meters. The current deposit now has a surface expression of 500 meters by 1200 meters. To date each and every hole is mineralized.
The road system is being built to accommodate drilling of the deposit. This means that the deposit will dictate where roads are cut and wisely the road cuts will be sampled as if they were trenching to cut costs and reduce unnecessary work of building roads and then cutting trenches. The company will not cut corners and is very methodical in its pursuit of this deposit.
The deposit is looking very much like the deposit of Torex Gold. Ana Paula is a skarn porphyry with a second overprinting of gold mineralization. Gold is found in the intrusion as well as in the contact zone with the host rocks. Gold concentrations in the intrusives are very consistent along with higher grade lenses of skarn and breccia. The whole area is faulted and fractured which has led to the transport of the gold bearing fluids throughout the area of interest.
The geological team is very happy with the results so far and knows that Los Filos is a very profitable mine owned by Goldcorp at a gold grade of around .68 grams per ton and a cash cost of 425 to 450 per ounce. So far Ana Paula is exceeding this grade with a very easily mined deposit right on the surface!
I am very comfortable having a large investment with this group. They are very aware of the float and will not dilute without reason. They are spending the money they have very wisely and want to prove up as many ounces as they can with the goal of selling or partnering later on down the road.
It is my opinion that Ana Paula represents the newest deposit in the Guerrero Gold belt well known for having deposits in excess of 3 million ounces! The market is obviously catching on to the potential here, and elsewhere on Newstrike’s massive landholding surrounding the AP deposit.
It is thought that there is a series of intrusions leading from AP to Apetlanca to the North East. An airborne geophysical suite is slated to fly later this year to determine the potential of this hypothesis.
I would like to extend my thanks and gratitude to the Newstrike team, both in the offices and on the ground for making this investment one of my largest wins with the greatest potential still to come. I commend their commitment to shareholders and dissemination of information to the public through an excellent website that is updated often and with very useful and detailed data.
I hope I haven’t forgotten anything, and if anyone has questions I will do my very best to answer them.
Warmest regards
Caliche Bahada
Cal, what’s your projected price to slowly start taking profit from?
i will probably take a little off the table at around 2 to 2.25… maybe 5 or 6 % thats an 8 bagger for my first buys.. 🙂
That’s awesome. Congrats and kudos to you for the insight leading me to get in at .45. Looking forward to what’s to come. Thanks again for being a great resource.
Looks like there maybe some profit taking going on now.
Caliche—-All the excitement , posting ,and expectation levels seem to be on NES…………(With good reason over the last 45 days.)……..However , I believe Ole , which is at least 30 cents lower than NES today , is a better buy…. In fact I believe Ole will hit $2.50/share sooner than NES…………Your comments ????
Praying ole hitsv$2.50 some day down the road, mad I didn’t follow caliche’s lead and sell some ole to buy more nes
Hi arlene..
i respectfully disagree with you. Ole has made several attempts to move higher and has been beaten down every time.. it probably will Make it to 2.50 but not before NES… lets talk when ole can hold 1.50
if NES comes with another good hole i think 2.50 will be a memory
caliche
Caliche—-Thx for responding…..In THIS matter , we just agree to disagree…..Will talk again , as you suggest , when Ole holds $1.50…. (most likely in 2-3 weeks)
Caliche – Do you see any possibility of a consolidation among the three principle owners of Oromin?
Mallard—I , too , would would be interested in Caliche’s opinion as I do hear rumors Ole is trying to get to 51% by making some deal with Badr….
I have heard through a third party that there are indeed talks ongoing to resolve the ownership issues..
once they are resolved the shares should start to reflect the value oromin has in the ground!
Through a 13% dilution?
in order to get the whole thing a 130% dilution would need to take place..
ole has 43.5 badr 13 and bendon 43.5
so oromin has 43.5 and has to issue shares equal to 56.5% of the holding of the ojvg 56.5/43.5 =129.88% dilution of the shares ..that would put ole at 311,000,000 shares
That is a high Dilution Factor for only 56.5%. Not sure what that would bring to the table other that it appears that Badr appears to be conflicting with some decision making – But, with only a 13% stake, it seems that posibly the other 43% stakeholder also may need to disappear?? 311,000,000 shares is an awefully high number – Wouldn’t it be more in the number of 194,000,000 or am I looking at the wrong numbers???
Caliche—-If your numbers are correct and Ole does go for it all AND they have proven up 5 million ounces (with 10 million blue sky) , what would be your guess on the share price at buy out???
If project is valued at least $1B, this equates to $3.21 a share.
That puts things into perspective for the positive pams.
Intersting comments. What I am hoping for is a consolidation into one company that is traded with stock issued in the new companies name. If this play is then turned into a mining operation, which is the direction I think it is going, we can see a rise in value as time passes and a stock that reflects it’s true value that can be traded at a higher price than what we have seen.
cs—-Thank you for your input re valuation and share price…..But I would think that with 5million proven ounces and 10 million blue sky , concession would be valued in excess of $2 billion , especially if price of gold exceeds $1500 by end of March ,2011……Caliche , would still appreciate your input/guesstimations…..
I would guess that Badr would be the subject of consolidation efforts. Absorbing their 13% share equally would leave Bendon and OLE with 50% each. That would give the stock more credibility with analysts. I don’t see the Saudis giving up their status as partner in exchange for shares, given that they must have had sound business reasons (tax related?) for setting up this structure in the first place. I hope Arlene is right. $2 billion sounds like a good number.
Look at the Ventana (VEN) Gold Corp buyout. Look at the market cap and outstanding shares and the amount of ounces proven, blue sky, prospective area, and the value per ounce they are getting.
Compare that with OLE possible outstanding shares per Cal’s guesses above and that can help with where the market is at in gold plays.
Just trying to go off what’s out there.
About Ventana
Ventana is a Vancouver-based mineral exploration and development company with mineral rights to 4,591 hectares of exploration property in northeastern Colombia. The Company has two project areas, La Bodega and Cal-Vetas, of which the flagship La Bodega project contains multiple high-grade zones of gold, silver and copper mineralization. Ventana has announced the results of the project’s scoping study and completed its first inferred mineral resource which includes 27 million tonnes grading 3.9 grams per tonne gold, 21.5 grams per tonne silver, and 0.14% copper for a total of 3.5 million ounces of gold, 19.2 million ounces of silver and 84.6 million pounds of copper. There is significant potential to expand the resource and the Company intends to continue aggressive exploration at the project both from surface and underground.
825 thou shares sell today, and it stays at 1.20……… hmm.
maya, buying Badr & going to a 50/50 split would be a big step in the right direction towards getting credibility. What worries me is that 50/50 could still leave the impression that Oromin is not completely in charge of the project – still a much better than 43.5%
Regarding valuation, assuming that the 43.5% issue is solved, $1 billion easy, $2 billion difficult unless things get crazy & I don’t know what that would look like but it sure would be fun.
Canaco (V.CAN) released fabulous drill results today & the stock didn’t move. It’s already at $1 billion valuation. Lakeshore (T.LSG) has been struggling for over a year just over $1 billion in spite of ongoing great drill results, starting production & with their deposits being in Canada.
the ojvg needs controlling interest or the stock won’t reflect the true valuation…just common sense thinking….cal can chime in?
to follow up on why, having a controlling interest opens up a known party to negotiate with…without that, i don’t see a 3rd party coming in and trying to deal with chet, knowing he has to represent the wishes of a partner before us small guys. he has no weight to push around at the table with the way the current structure is set up. too many unknowns until there someone with at least 51% interest.
imho 50 50 wont do it..there needs to be a clear majority interest for someone to buy..no one will pay top dollar for a minority interest..
i can see about an 800 million valuation with 4 million ounces and 100% inetrest..with some spec..311million shares about 2.50/share (assuming they get their economics in check)
im still staying with NES.. i like the people, very much, they are very intelligent and market savvy as well as technically proficient. the deposit should equal oromins by summers end with only 8000 meters drilled so far they far outweigh oromins 200000 meters and 150 million dollars put into sabodala..i still think oromin would have been better off to raise 150 million and buy ounces like torex.. but we are where we are and the only way out is to tidy up the ownership issues and move on..
i will not buy any more oromin until i see positive developments on this front.. would rather pay 1.50 for 100% than 1.20 for a glimmer of hope at 50%
hi dale .. i think ole has 135 million now so they need to issue another 135 to bendon for their 43% and another 41 million for the 13% due to badr.. 311 mil.. geez i hope those numbers are right..
Whay can’t the capital invested in this company be merged into one company and not worry about the dilluitiion of the stock?
Caliche – Is the rival bid for Lundin by Equinox maybe a sign things are heating up in M & A?