surrealistrader
2 semanas hace
To answer your question, it's basically a risk-free transaction for Scherrer, who not only receives the shares in exchange for the cash (a particular class of shares with particularly opaque and risk-averse terms,) but whose construction company is set to be the recipient of the funds he is contributing. Also, as said earlier, (further indicating favoritism) it "directly benefits the most influential shareholders of SDRC (The Lelands) who own the land that is being developed, who's interest is to keep this stock in a sustained cycle of buyer interest while the company's stock equity transactions funnel money to them and their association via the financing of development of the assets it owns and controls."
As an alternative to pursuing mineral reserves, a processing facility can generate revenue for this company beyond just feeding it with SDRC's ores. SDRC can contract out its use to other companies and producers in the region. I believe the motivation taking precedent here is to grow the value of the district, its economy, and the local real estate. Despite it being somewhat messed up from a public mining stock perspective, everyone on board with it seems to have accepted that proving the economic feasibility of whats underground is not the preferred way to achieve that end.
gitreal
2 semanas hace
8 million dollars (in exchange for preferred stock) in order for the corporation to build a state of the art metallurgical facility
WHY??
A company has no use for a state of the art metallurgical facility if that company has no reserves, almost no drilling (they drilled one hole?), no technical reports by 3rd Party professionals, no production or sales, and no credible assays.
Instead they have cockamamie stories about PGMs, rhodium, meteoritic origin story, crazy guy pointing his XRF at random rocks and getting truly bizarre results, Homer bucket metallurgy testing, truly whacko mineral valuations, and then there's always that shady promotor.......Sunny! What a clown show......
How much longer can they pretend to be a serious exploration/mining company? Not long, IMO.
surrealistrader
2 semanas hace
The Lucky Ben lease is expiring end of 2024.
Basically everyone involved in this stock seems to perceive in some way that "things are coming to a T" with this stock. To begin to explain the underlying reasons of why this is, I think we need to turn our attention to a major valuation-related decision that's about to be made concerning the land Sidney Resources operates on.
To preface, all the core land that SDRC is developing are old patented mining claims owned by the Lelands; the current largest shareholders in SDRC. SDRC pays the Lelands (in cash and in shares) to lease and to use the land. As part of this agreement, SDRC develops said land: accessibility, infrastructure, permitting and building of roads, enhances safety, pushes deeper underground, constructs buildings.... and most pertinently and recently, a state of the art metallurgical processing facility is planned and financed. These activities add value to the Lelands' property beyond just for the purpose of fulfilling SDRC's output capacity or their task of delineating a mineral resource.
This arrangement has presented some good things for this company and shareholders: The Lelands are shareholders like you and me, and as such, they also have a vested interest in the company's success. So far, they have offered SDRC seemingly favorable lease terms (in exchange for cash and an, albeit enormous, cache of restricted stock) and additional support to ensure this project's success. This less capital-intensive arrangement frees up funds for other operational needs.
You may have gathered already that I, however, believe there is a possible conflict of interest to be appreciated here. Public mining companies cannot and must not become "married" to properties at such an uncertain stage. Typically these will need to reserve the option of moving on to new projects if exploration or feasibility studies turn out unfavorable. Responsible speculators in this industry must identify what that "go or no go" is for any given project, and plan their entry and exit accordingly.
The problem with SDRC, however, is that current management has indeed married themselves to this property. Under no circumstances will they move on from the Lucky Ben and their agenda in the broader Warren district, however found to be favorable or unfavorable. So while SDRC, with support from the growing bid and bullish investor outlook, has gone so far as to develop the land's accessibility and infrastructure, but has not done anything to pursue a make or break situation for the mineral resource over the longer term. This public mining company, bizarrely, and in line with an unfortunately common theme, has taken to managing investor expectations more diligently than the pursuit of reserves. The life of the mine economics remains obscured in mystery, and I unfortunately believe this is the way they like it. Sure, with Groundhog as their mining contractor, they drilled in order to "confirm the continuation of the narrow vein gold system," but they only drilled as far to determine that, and it did little to confirm or dis-confirm the economic feasibility. If anything, it came up as a dud - since we got a limited picture and recommendation to discontinue further drilling. We still don't have the guaranteed profitability legit mining companies typically insist on before development, construction, and production via the specifically defined and situationally used term "reserves." The current management, led by the Lelands, have prevented the company from pursuing (or perhaps releasing) information that might disqualify this property as a profitable mining endeavor, and because drilling has the potential to do that, management have opted for alternative ways to create investor interest. In many ways, this company has resorted to classic OTC-type promotion tactics, teasing and withholding material information for long periods of time, novel and borderline believable geological backdrops, insane and badly calculated valuations, all of which have only resulted in a polarization of their investor audience, and caused stress and damage to their brand.
To add further weight to this particular intrigue, as of recently, a board-member and "investor" by the name of Jim Scherrer gave the company somewhere in the range of 8 million dollars (in exchange for preferred stock) in order for the corporation to build a state of the art metallurgical facility on the Leland's land, assuming that this same Jim Scherrer's construction company will be the recipient of these funds as the contractor that will handle this very project. I demonstrated in a prior post that not only is this is a highly suspect circular transaction, may indicate favoritism, an effort to obscure the source of funds, takes advantage of a vaguely defined and disclosed class of shares in the corporation, and a possible money laundering scheme, but it directly benefits the most influential shareholders of SDRC who own the land that is being developed, who's interest is to keep this stock in a sustained cycle of buyer interest while the company's stock equity transactions funnel money to them and their association via the financing of development of the assets it owns and controls.
So lets see how this lease agreement lines up valuation-wise and with the current time line.
From most recent SDRC quarterly filing on OTCMarkets.com
"Sidney Resources paid $60,000.00 for a five-year lease with an option to renew the lease for 5 additional years. The Board of Directors has signed a lease amendment extending the lease for the Lucky Ben Properties an additional 5 years beyond when the lease that was scheduled to expire at the end of 2019 and with the option to renew the lease an additional 5 years as long as work on the properties remains active. Under the terms of the Lease Amendment, Lessor will be issued 20,000,000 shares of restricted common stock as payment for the lease amendment. Under the terms of the new lease amendment, Sidney Resources Corporation has the option to continue to lease the properties for an indefinite period of time with the condition that development work continues each year."
At the end of this year, 2024, five years from the end of 2019, this lease agreement is to be renewed. A major valuation decision is about to take place. We may expect this lease agreement to be amended at the end of this year just as it was at the end of 2019. How will the work of the last 5 years and its implied change in valuation of the Lucky Ben be reflected in this leases renewal? Will new lease terms be favorable and transparently negotiated? Will it perhaps be unfairly valued, indicating the favoritism we have already observed, and the outsized influence of the Lelands on this company's decisions? What due diligence have the involved parties completed in order to "mark these assets to the market" independently in order to ensure fairness? Will valuation depart from reality like we have seen with the mineral assets advertised, and if so, what will that mean for the increasingly noticeable parallel trend of diverging interests between large and small shareholders?
One thing we can all be sure of is that questions are mounting much faster than answers.
gitreal
2 semanas hace
IF I were a "big shareholder" with more than say, $25K, into this, my first step would be to hire a real, 3rd party mining engineer or geologist to go over the company technical information. Wouldn't take much time because there is almost zero technical reporting to review....it is mostly PRs and social media posts. Ask the engineer or geologist for an opinion letter regarding the company's claims about grades, tonnage, and geology (meteorite impact theory). And especially about the evidence they have presented about PGMS....which is zilch. And those truly wacko valuation estimates they've come out with. A day of review, and an opinion letter might cost you $1500.
Then, if the opinion does not come back favorable (and it won't, IMO), think about retaining an attorney. And figure out if you want to pursue it further....to the State AG's office, for instance.
And save every email, every mailer, anything related to this company promoting to you. Not to mention all the social media posts you can screen-shot, especially if there were DM's behind the scenes from company management or promoters.
surrealistrader
2 semanas hace
I am disappointed in Don Durrett for allowing himself to be quoted in such a way as he did. I was baffled when it happened, and still am, even if all he was basing his words on were "assumptions and hypotheticals." He should have known that they would spin his words and make him into a quoted stooge.
@DonDurrett
Jun 9 2022
Really, you think pink-listed stocks are fine? Most investors don't trust them (I don't). They should know that. What's so difficult about submitting their financials to the SEC?
We're not talking about getting listed on the NYSE. We're talking about OTCQB.
I've had my website for 12 years. They are the only US-based gold miner with a market cap over $20M that only trades in the pinks.
It's also rare for companies of their size not to have a company presentation on their website.
My takeaway: they are not shareholder-friendly and don't care about retail investors.
Sean worked on him in private and then this happened:
$SDRC : From @DonDurrett of goldstockdata.com/
"Yesterday, I valued your company at $1.5B at $3K gold."
"Today, I increased it to $2B. I’ve seen several 100K producers valued at around $1.2B at current gold prices. So, a 100K producer at $1.5B is possible at $3K gold. To get to $2B, you will likely have to increase production to 125K oz, although at 3 opt, it’s possible at 100K production. It would be unprecedented."
#Investment #Commentary #OpinionPiece #Gold #Silver #PGMs #Idaho #Producer #Mining #Stocks
Who knows what (the hell) happened, who paid who, who signed what, what drugs were administered, etc.
surrealistrader
2 semanas hace
If you think names, emails, addresses are all that's needed....
If you think you know everything you need to know already in order to put your faith in management, or to otherwise make a sound investment decision... if such as complete a list of names, emails, and addresses you've collected of people associated with Sidney Resources give you the assurance that you're investing in a transparent, materially thorough, veracious, professional, and proficient public mining company, then you are not only indeed gullible and naive, but you have no imagination.
If the promise to up-list to TXSE upon yet another deadline wasn't so blatantly empty, I would look forward to the SEC audit and reporting schedule that would be necessitated by it. I guarantee there's a reason SDRC has foregone such a process so far and it definitely wasn't cost. If I were you, I'd use my head and rethink what you just said; This is the OTC. No amount of names, emails, and addresses can fix the degree to which investors have actually been operating with material omissions and misrepresentations to date. Some of these material omissions are even celebrated by bulls as an edge (because you can follow the advice of the insiders who do have that info, and profit.) Anybody with any experience in investing in public companies in legit mining (let alone those who would care enough to give this company the time of day) will tell you how specific the list of things are that would actually make this mineral project transparent, competently developed, and an attractive speculation candidate in the interest of necessarily eliminating uncertainty. Speculation SHOULD be the systematic elimination of uncertainties, and the fact that not only some bulls have accepted that certain uncertainties are not important enough for the company's success to bother eliminating, but the fact that some even insist that there are no uncertainties (or risks) to eliminate is just plain insane.
Even our favorite mining stock commentator Don Durrett, after being spoon-fed non-public info by our CEO several months ago, used hedging language when referring to SDRC on Twitter: "These bets are never sure things, and are more likely to break your heart than make you rich." ...and that's probably even after assuming SDRC knows what they're interested in underground and are so called "doing it right."
surrealistrader
2 semanas hace
"It will be a very Merry Christmas in 24'"
... said Sean Rae Zalewski to conclude this PR from 1 year ago:
https://www.nasdaq .com/press-release/sidney-resources-corporation-reports-assay-results-and-a-comprehensive-evaluation-of
It seems the promotion machine has upped the ante considerably since then. The "historical stockpiles" now show higher grades and a many-fold increase in the quantity of material ready for processing. If you ask me, it was over the top then, and it is especially over the top now.
The above PR was the last time sampling integrity was talked about or addressed. For the needs of a public mining company, it's improper to use Steve Dobson for this purpose. Steve Dobson has no accreditation and isn't a true independent third party. There are conflicts of interest in using him to "uphold the sampling process" as an unaccredited, unregistered, employee of the mining contractor.
The bonanza-grade century+ old "tailings" story is borderline believable and is clearly an alternative to a dead-end exploration campaign. The meteorite-derived, uniquely rhodium-dominant, Platinum Group Metals deposit that supposedly fused with all the in situ gold is the same kind of thing; without comparable and not reproducible by any economic mining operation in documented history, let alone in any geological study of the Idaho Batholoth. These are likely to backfire for this company when subject to scrutiny. The promise to list on a stock exchange said to be more stringent than NYSE or Nasdaq one year from now is at best empty. It sure feels like things are reaching a desperate "T" with this company.
Analytical results are too often curated from larger undisclosed data sets, and crucial material information about them infamously withheld. Handheld XRF results come with their own list of evident abuses, and should not be cited in any way shape or form unless for the purpose of reproduction via analytical reporting from a reputable lab.
Who knows where all these piles (which over the past year have multiplied many-fold in size, and are said to be found in even higher grades since found initially) actually came from, if they are actually represented correctly at all. We have seen other examples of the OTC shameless show us pictures of bags of alluvial sands, including their unbelievable mineral profiles advertised, purchased and delivered to remote locations. Is this another one of these? (https://x .com/IGEX_Official/status/1524765895175942145)
Dividends? Without a formal measurement of what's underground, nor a reputable demonstration of economic feasibility, no cut off grades nor reserves, we have no basis for a profitable mining operation. Nevertheless, the company has gone full steam ahead with the investment in construction feigning such crucial and due diligence. Cash for equity financings, when superimposed upon purchases by the corporation, show signs of favoritism, circular transactions, and perhaps money laundering. Financial professionals and experienced financiers in mining, without the indication otherwise they have come to expect by observing certain standards upheld in this industry, would see an investment here as risky, supporting a necessarily capital-destructive enterprise, operating with significant material omissions and misrepresentations, and showing other signs of abuse.
Did you actually think you were getting a cash distribution?
surrealistrader
3 semanas hace
Will Jim Scherrer get the construction contract?
Is that a given? If anyone is puzzled about how businesses like SDRC, without dedicating themselves to proper mineral asset development, can make money for insiders and board members, even while "never unrestricting or selling their shares," this is how they do it.
If Jim Scherrer, who owns the construction business likely to be used for the construction of the planned facility is receiving preferred shares while his company is also a recipient of substantial payments for construction services, it creates a potential conflict of interest. If Jim Scherrer's construction company, or Western Frontier, or equipment suppliers, or Red Beryl Mining Company, or any other contractor can charge inflated prices for its services, it could serve as a mechanism to funnel money back to the owner (who also holds the shares), effectively laundering funds.
I would be on the lookout for things like overvaluation of services with SDRC. If the decision to award the construction contract lacks competitive bidding or transparency, or the terms of the share raise are anything less than fully disclosed, it raise concerns about favoritism, undue influence, and, perhaps, money laundering.
The source of the $8 million cash used to purchase the preferred shares should be scrutinized. If the construction company reinvests any portion of the money received from the project back into the public company (e.g., by purchasing additional shares or making loans), it could indicate circular transactions designed to obscure the origins of funds. If the board-member, providing services has significant influence over the public company or its decision-making process, it could indicate an arrangement where funds are being moved under the guise of legitimate business activities.
You guys have a clusterfuck nightmare of an SEC audit ahead of you if you're seriously targeting an uplist to a stock exchange said to be more stringent than NYSE or Nasdaq. Start ASAP because 13 months is not enough time. Another one of Sean's promised deadlines is just about dead on arrival.
surrealistrader
3 semanas hace
This round of funding was supported and materially participated in by Board of Directors Members Sue Maas and Jim Scherrer.
The 8 million cash was received in exchange for Preferred Shares. Obviously, the terms of these are more favorable than the common share class. What was expressed to me by Sean albeit anecdotally and never released officially, was that these shares guarantee multi-fold payout in the event of a sale of the property or a buyout. In other words, there are non-publicly defined terms "upon the dissolution of, or upon any distribution of the assets of, the Corporation." What has been released publicly was that these are restricted for 2 years and can be converted to restricted common shares at any time (without detailing any further conversion rights like 100x or 1000x preferred to common as we see with other OTC stocks.) The company filed notice that they have amended their articles of incorporation earlier this month in order to increase the authorized share counts of both classes.
In previous quarterly filings, here is what is said about the preferred share class:
For preferred stock, describe the dividend, voting, conversion, and liquidation rights as well as redemption or sinking fund provisions.
The Serial Preferred Stock may be issued, from time to time, in one or more series with such distinctive serial designations as the Board of Directors may establish and such Serial Preferred Stock: (a) may have such voting powers, full or limited, or may be without voting powers; (b) may be subject to redemption at such time or times and at such prices; (c) may be entitled to receive dividends (which may be cumulative or non-cumulative) at such rate or rates, on such conditions, and at such times and payable in preference to, or in such relation to, the dividends payable on any other class or classes or series of stock; (d) may have such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; (e) may be made convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock of the Corporation, at such price or prices or at such rates of exchange, and with such adjustments; and (f) shall have such other relative, participating, optional or special rights, qualifications, limitations or restrictions thereof, all as shall hereafter be stated and expressed in the resolution or resolutions providing for Directors pursuant to the authority to do so which is hereby vested in the Board.
So basically, the terms of each of these distinctive serial designations can be different, and are always defined in private by the Board of Directors at the time of issuance. SDRC has taken a noticeable step back in transparency over the past several years, and the details concerning their share structure is only one example. I'm sure other shareholders besides me would like to see these defined in full and released officially.