Further to the post below, the following mail is received from A. Reader and is an object lesson in how scumbag juniors feed off the back pockets of the unsuspecting speculator.
I nominate Selwyn for the Academy Award as The Most Egregiously Self-serving ‘Screw the Shareholders’ Approach.
Last year they sold their Yukon properties (for a song, but that’s another story) and then announced they were going to ‘return the capital to shareholders’ via a dividend. As someone who is unfortunate enough to hold some shares bought at much higher prices years ago when I was still learning this game, I made repeated attempts to contact them to get an explanation as to why they would so something so stupid when:
1) the funding environment is so poor for junior miners
2) the zinc market is preparing for shortages within the next few years
3) the company has zinc properties in Nova Scotia that will need money to be brought into production to take advantage of that shortage.
I made repeated attempts to contact the company to get an explanation but all were ignored, presumably because I stated my intentions in the e-mails I sent and phone messages I left.
And you guessed it, today they announced that they need to raise money to get the Nova Scotia mine into production.
Oh, and new management came in just before this happened, and they just consolidated the shared 100:1.
So the new managements distributes lots of cash they knew they would need to insiders via the dividend, consolidates the shares, and then announces they will need to raise the money they just distributed. It will be very interesting to see if this is done via PPs to those same insiders.