Then you have the 'market efficient' guys here who will try to have you believe that there are no mis-priced jrs at a bargin, certainly not now, surely the SP didn't move on receipt of a JV and $20 Million cash because, as I heard, because of the claim of an anonymous poster on an anonymous investment chatroom that the management would likely burn all the money away and dilute everyone. He said any responsible mgmt should instead put the company into hibernation. Golly, you just find the smartest and most honest people on the internet, eh?
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You brought this up...
As far as I remember, the reason there was no bump in SP (and the fairly steady loss in SP since that announcement) was due to the 75% back in not proceeding as everyone was led to believe it would (Hundreds of millions spent by Teck developing the project and earning their 75% backin on a somewhat defined timeline). There was dissapointment for many as we thought we would be half built by now with a commitment vs. no defined timeline.
The new deal left us with is a good sized $20 million + tax refund nest egg to wait for Teck to make up their mind what they were going to do. More cash to follow with a positive production decision. With a positive production decision the current deal is good. Without it it is more troublesome.
Many here downplay the negative effect the unknown timeline for a production decision has had on our SP, and argued we have a better deal now due to a variety of reasons that don't need to be debated again. Time will tell who had the best insight on that topic. You are welcome to justify for yourself what you believe to be true, but you can't claim anything is settled as it is all based on assumptions of a positive result.
Here we sit a few short years later with 22 million spent and a year of maintenance cash left and a few properties of little value in the near term. In my opinion, VD, SB and Eaglehead will be difficult to monetize in the next year. They all need more work, and market timing to sell isn't good IMHO.
Some say we will just spin them off - like it will be no problem or EE will loan us cash without dillution. Elmer says no dillution, and maybe they will be right? I can't say they are wrong for a fact, but I think they are...
I still stand by my opinion that we should have hunkered down and been careful to conserve our cash, and considering the position we find ourselves in I think we would be better off all cashed up now. You may think that is stupidest thing ever, and that's your perogative.
Also, I don't think leveraging a HELOC to buy stocks is a great idea (let alone $100,000) and would caution other investors reading your post on that topic to think long and hard before using such an extreme tactic, but I do hope you see your anticipated 20-40x payback.
I think you dramatically downplayed the risks of investing with borrowed money, regardless of what your calculations come up with - it can easily end in disaster.
