IKN

Take physic, pomp

If Goldshore Resources (GSHR.v) wants its share price higher…

…it’s time its C-suite faced reality. They need to stop pretending they can coast into the MRE and PEA on current treasury, nobody is buying the idea and it’s easy to understand why. With C$5.3m in treasury at the end of its last declared financial quarter, end September 2022…

…then two small and rather forced looking raisings on shareholder-unfriendly terms at the end of December for gross proceeds of C$6.8m and a revised plan last year to cut back on drill rigs in order to save cash, you would have thought GSHR would be okay for cash but the information from its latest corporate presentation…

…puts a damper on that idea. Do the quickmath and see GSHR blew through all-but C$4.2m of the C$12m in combined treasury between October 1st and January 9th and that means there has to be another financing in the works. So much for that change of plan in mid-2022 to slow down its cash burn and aim for a smaller initial resource. The market isn’t stupid and knows GSHR has to dilute (again), look no further for the reason its PPS has been unresponsive despite plenty of recent newsflow.

It might not be something retail bagholders want to read, having been herded into this stock in 2021 and 2022 by a long list of rockstar anal ysts and newsletter pumps, but GSHR’s management needs to get real and stop pretending the stock will rally on organic newsflow. They changed their own story half way though last year, they cannot expect the same optimistic targets as before and the GSHR position of financial weakness is crystal clear to anyone who spends more than five minutes looking at the company’s financials. The only way GSHR stops the rot is to hit the reset button, assume 20c is the new baseline, bite the bullet, raise capital to get through more than just one quarter (preferably all 2023 and some of 2024) and get it done at the price indicated by that nice Mr. Market, be it horribly dilutive to current holders or not. If they don’t face up to the cruel reality they’re set to waste another six months and will get zero traction when the 43-101s are announced. And maybe GSHR needs a new CEO with a better strategic outlook, as that December placement did more harm than good.

Disclosure: No position in GSHR.

5 Comments

    Good analysis. Another are to look at are the very high C suite management costs. They are running it like an intermediate whereas its a stressed small cap developer. I suspect that is the last line item management and the CEO will want to address.

    Reply

      Agreed all points. There was also plenty of discretionary G&A to make sure the high traffic newsletters were manning the pumps. The dirty games go on and on.

      So far GSHR has been a pointless exercise and the mid-stream strategy change to aim for a smaller resource this year now looks dumb. Moss Lake is and always will be “go big or go home”, any prospective buyer can work out how to build their own high grade starter pit, tyvm. Moneta Gold (modern iteration) is the role model and these days, it’s 5x the mkt cap of GSHR.

      Reply

    Thanks for the frank (and I’m sure accurate) assessment. Very helpful!

    Reply

    […] month ago in “If Goldshore Resources (GSHR.v) wants its share price higher…” we pointed to the cruel reality of things at this promo pump […]

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    […] 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 […]

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