For more than a few months, PS Dave over at VancVenture has expounded on his theory that Waterton (e.g. Waterton Precious Metals Fund) are a bunch of patsies with a failing business model. I wasn’t so sure, took the opposite side and in the end let my end of the discussion drop, privately agreeing to disagree with him. However, it’s looking as though he was right and I was wrong on this one and by way of illustration, let’s take the case of Atna Resources (ATN.to) in 2014 as a marker. Here’s the chart…
…and what we’ve seen in the period is:
1) The stock rallies along with the market.
2) January 31st ATN announces a $22m loan deal with Waterton, which will be used to pay off the $18.1m ATN loan held by Sprott Resource Lending and leave some working cap in hand.
3) ATN stock drops on the news (and you kinda maybe perhaps and could get the feeling it was already telegraphed to “certain people” on the 30th).
4) Today ATN offers a mediocre 2013 production and 2014 guidance NR.
This isn’t really about the trials and tribulations at Atna (their snafu at Pinson is well documented). It’s about the way in which the Sprott dudes managed to extricate their cash from the company, which was one of the more obvious sell signals of our time. Today’s NR underscores that.
So yeah PS Dave, I’m with you on this one now. Meanwhile, cash strapped juniors looking for a line of credit in order to pay management’s bloated monthly paychecks move forward diligently on their exciting drilling prospect should get in touch with Waterton, they seem to be willing to do a deal….just throw them a few cheap warrants or something.
UPDATE: PS Dave has his latest on Waterton, specifically about the ATN deal, here. He goes off on a slightly different tack but it’s still a case of liar’s poker here. Who’s zoomin’ who?