Take physic, pomp
03 / 23 / 23

Goldshore Resources (GSHR.v): Better late than never

In the post dated February 2nd, If Goldshore Resources (GSHR.v) wants its share price higher (it’s time its C-suite faced reality.)”, we pointed out that despite its December placements GSHR was again short of cash and they couldn’t fake it otherwise, so if the company wanted to regain momentum it needed to bite the bullet and raise cash at the price dictated by the market. At that time, it was a 20c stock.

A month went by, the stock dropped to 18.5c, we noted as much in Another wasted month at Goldshore Resources (GSHR.v) dated March 3rd.

It took another three weeks and and further haircut on the stock price for GSHR to face cruel reality, but we finally got there. Today, this:

VANCOUVER, B.C., March 23, 2023: Goldshore Resources Inc. (TSXV: GSHR / OTC Markets: GSHRF / FWB: 8X00) (“Goldshore” or the “Company”), is pleased to announce that it has entered into an engagement letter with Research Capital Corporation and Eventus Capital Corp., as co-lead agents and joint bookrunners (the “Lead Agents”), on their own behalf and on behalf of a syndicate of agents to be formed (together with the Lead Agents, the “Agents”), in connection with a brokered private placement of the following securities for aggregate gross proceeds of up to $5,000,000 (the “Offering”):

  1. conventional common share units of the Company (each, a “Unit”) at a price of $0.17 per Unit, comprised of one of one common share of the Company (each, a “Common Share”) and one-half common share purchase warrant (each whole warrant, a “Warrant”);
  2. flow-through units of the Company (each, a “FT Unit”) at a price of $0.195 per FT Unit, comprised of one Common Share that will qualify as “flow-through shares” within the meaning of subsection 66(15) of the Income Tax Act (Canada) (the “Tax Act”) and one-half of one Warrant.

Each Warrant shall entitle the holder thereof to acquire one Common Share at an exercise price of $0.25, for a period of 24 months following the Closing Date

There’s also a 15% overallotment facility on the brokered deal. As flow-thru shares are for putting into the ground and not for spending on G&A, it will be interesting to see the eventual ratio of the unit types but that’s something for another day. So it may later and even more expensive than it should have been, plus the 25c half warrant make the clippers a latent threat once the financing is closed, but at some point the nitpicking has to stop and we applaud GSHR for doing the right thing. At last. Probably the right size too, as long as they can reel in that overly expensive G&A bill this year. With the MRE expected in April, people buying this placement can look to the potential catalyst to flip out a profit and as such, this placement should be popular and fully fill.

03 / 23 / 23

In The IKN Weekly this weekend…

…it is time to put money where mouth is and add more copper exposure to the portfolio but, this time, it’s a brand new buy. Separately from that main event, we also float a new idea for a high risk speculative copper play priced in the pennies. For those of you who like that sort of thing. Copper, people. Copper.

The IKN Weekly: Unreadable guff and nonsense that has somehow managed to cling on to its meagre audience for 722 weeks and counting.

03 / 22 / 23

Copper pre-FOMC

Wednesday morning and four-and-a-bit hours before the real trading week begins, but whatever happens to the metals complex in the day and a half to come copper’s move back above U$4 in the last couple of days has been noteworthy:

Anyone who still thinks Dr. Copper is mostly influenced by US matters (currency, economy) would have had a tough time predicting this rebound, all before Mr. Powell does his thing. Maybe, just maybe, demand is robust among real end-users in the country that uses over half of the metal.

03 / 21 / 23

The IKN blog is now 15 years old

To be exact, 15 years and ten days. It wasn’t on my mind but it suddenly occurred this morning to check and, yes indeed, the first post was on March 11th 2008. Here we are, over 15 years and over 15,000 posts later.

So happy belated birthday to me. Or it. Or something.

03 / 21 / 23

First Majestic (FR.to) (AG): The Great Rock’n’Roll Swindle

When we last caught up with Keif’s First Majestic (AR) (FR.to) it had just posted its 2022 financials, the trainwreck called Jerritt Canyon was sticking out like the veritable sore thumb and we said as much, in the post First Majestic (AG) (FR.to) and the price it has paid for Jerritt Canyon dated February 23rd 2023. We ran the numbers, did a few pretty colours in charts and showed how Jerritt Canyon had already cost the company over U$870m, all due to the way the Otto West of the mining world had fallen for Eric Sprott’s soft-soaping and decided to expand his empire by moving into the Nevada gold business. Here’s how the post ended:

If AG buying Jerritt Canyon doesn’t rank as the dumbass mining deal of the decade, tell me which one I forgot.”

That should be clear enough. And indeed, as the conversation in the comments section noted Eric Sprott quickly went about the task of dumping his FR.to shares and gettin’ outta Dodge, he knew the reality of what he’d just sold to Keif while FR went about its task of incinerating even more cash at the mine. Even when its 2022 numbers came in as bad as they did, FR.to still insisted on its capex plan to turn around the asset (term used as loosely as humanly possible, of course) and said it would turn a profit this year. Here’s the 2023 guidance, as published by the company on February 23rd 2023:

Jerritt Canyon was slated to produce 30% of FR’s output this year and while the forecast AISC was nothing to write home about, the company line was that things would improve as its laundry list of infrastructure improvements were checked off and that First Majestic’s move into the gold business would be consolidated. In their own words in the MD&A, “The increase in forecast gold production is primarily due to improvements in mine production at Jerritt Canyon resulting in an expected 74% increase in gold ounces in 2023 when compared to the prior year.”

It’s worth reflecting that Keif and FR published that less than one calendar month ago. Last night, this:

Vancouver, British Columbia–(Newsfile Corp. – March 20, 2023) – FIRST MAJESTIC SILVER CORP. (NYSE: AG) (TSX: FR) (the “Company” or “First Majestic”) announces today it is taking action to reduce overall costs by reducing investments, temporarily suspending all mining activities and reducing its workforce at Jerritt Canyon effective immediately.

Continues here

So what happened? Well folks, as this is the same company that has raised U$200m by selling ATM shares to the open market for the last two years in order to avoid a cash crunch and as at end 2022, its books looked like this…

…this desk’s best guess is that the delusional Keif has been read the Riot Act by corporate creditors, maybe even his board has told him to sit down and shut up for once. Be clear, these days First Majestic is in the business of selling paper to fools in order to stay afloat, its metals desk is now a sideline and a loss-making one, at that. So with the ATM window closed until July 2023 (even this company bows to SEC rules) it was beginning to face the potential of a corporation-wide cash crunch and that would not have gone down well with the debt holders or with Keif’s BDSM meister at Wheaton, Randy Smallwood. There’s only so much promotional and marketing stupidity available to mask the creaking edifice of First Majestic, Keif’s social media squawking about $200/oz silver only fools the dumbest of the dumb money and sadly for him, those people don’t tend to have access to the seven, eight, nine digit money his company now requires to dig itself out of a hole created out of nothing by Keif, his imagined world and his out-sized ego. In other words, yesterday reality bit him firmly on the backside. About time, too.