Those of you who recall the almighty FUBAR that was Banks Island Gold (ex BOZ.v), the junior that BSsed the market about its ability to produce from the Yellow Giant project (on the island in Northern BC). Ben Mossman was the president/CEO of the company that failed to produce any meaningful amount of gold. Instead it managed to bankrupt the company and cause massive losses for the people who bought into the Louis James/Casey Research/CEO.ca pumpo on the stock (yes indeed, it was Louis Little Wolf Lobito’s James “largest personal position”. You may also remember how much IKN laughed about the Lobito pump at the time. This one, too).
Well folks, Mossman is at it again at his new scam Rise Gold (RISE.v), a company with a project that looks good on paper, but as soon as you scratch the surface and do the DD it becomes clear how much chance the mine project has of ever being permitted (between slim and none). So let’s check in at the RISE.v website, starting with the CEO biog:
Ben Mossman | President, Director, and CEO
Mr. Mossman is a mining engineer with over 15 years of experience in
the mining industry including experience in capital markets, project
evaluation, acquisitions, mine operations, and development. Mr. Mossman
has worked at eight producing underground mines with production rates
ranging from 250tpd to 3,000tpd. Previously, as CEO, he lead the
exploration, permitting, financing, construction, and operation of a
profitable gold mine in British Columbia which was one of the only hard
rock metal mines in the world to use pre-concentration (DMS) to
eliminate all surface disposal of tailings. Mr. Mossman has been
involved in several other mine start-ups, including as mine engineer at
the Snap Lake Mine for DeBeers Canada and the Bellekeno Mine as Chief
Engineer for Alexco Resource Corp.
That’s the whole thing, strange how it totally fails to mention Banks Island Gold, isn’t it? Fails to mention the bankruptcy. Fails to mention the total losses taken by equity holders. Fails to mention the way he was constantly accused of environmental damages at the mine site by authorities, including obstructing enviro officials from doing their jobs and eventually found guilty of violations of the BC Fisheries Act and Environmental Management Act. Anyway, over at Rise Gold (RISE.v) we have this news out today.
In it, we read that RISE.v has (and we quote) “…increased the size of the non-brokered private placement
previously announced in its July 3, 2019 news release from C$1,750,000
to C$4,500,000 through the issuance of up to 64,285,714 units (each a
“Unit”) at a price of C$0.07 per Unit, with each Unit comprising one
share of common stock (a “Share”) and one-half of one share purchase
warrant (the “Private Placement”). Each whole warrant (a “Warrant”)
entitles the holder to acquire one Share at an exercise price of C$0.10
for a period of three years from the date of issuance.“
previously announced in its July 3, 2019 news release from C$1,750,000
to C$4,500,000 through the issuance of up to 64,285,714 units (each a
“Unit”) at a price of C$0.07 per Unit, with each Unit comprising one
share of common stock (a “Share”) and one-half of one share purchase
warrant (the “Private Placement”). Each whole warrant (a “Warrant”)
entitles the holder to acquire one Share at an exercise price of C$0.10
for a period of three years from the date of issuance.“
Okay fair enough, it’s a private placement that coincided with a surge in the gold price and the junior has taken advantage of the interest by expanding its placement. Potentially shady, but nothing particularly unusual and if it were just that, it’d be worth a shrug. But then comes this:
The Company announces that it has entered into a non-binding letter of
intent with Eridanus Capital LLC (the “Lender”) for a US$1,000,000 loan
(the “Loan”). The Loan has a term of 4 years and an annual interest rate
of 10% for the first two years increasing to 20% in year 3 and to 25%
in year 4. Interest will accrue and be paid along with the principal
upon the maturity date. The Lender will be issued 11,500,000 bonus share
purchase warrants as additional consideration for advancing the Loan.
Each warrant entitles the holder to acquire one Share of the Company at
an exercise price of C$0.10 for a period of three years from the date of
issuance. The Loan may be repaid prior to the maturity date, in whole
or in part, provided that all accrued interest is paid. In addition, if
total interest payments are less than $200,000 (two years’ interest),
the difference will be paid to the Lender as prepayment compensation.
The Loan will be secured against the assets of the Company and its
subsidiary and will be used for permitting, engineering and working
capital at the Company’s Idaho Maryland Gold Project.
Turns out that this entity, Eridanus Capital LLC, was only registered as a company a couple of weeks ago and its business address is a Biz PO Box drop service out of Sheridan Wyoming (an old clapboard railway station building, in fact). Which makes one wonder why RISE.v is so keen on getting its hands on this U$1m for “working capital purposes” from a brand new start-up registered in middle-of-nowhere USA when it’s just raised C$4.5m for exactly the same purpose, working cap. Also, why is RISE.v willing to pay a minimum of $200,000 in interest (if they pay back in two years or less) or up to $650,000 (if they pay back in four years) for this loan that they really do not need? All on the back of a CEO with an extremely dubious past history (that he’s obviously keen on burying). Perhaps if Mossman helped us with the identities of the people behind Eridanus Capital LLC, it would surely help the transparency on this junior’s activities. Or maybe he prefers keeping us all in the dark again…
https://www.theunion.com/news/rise-gold-ceo-calls-county-naive-in-dealings-with-nisenan/