surrealistrader
3 weeks ago
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
3 weeks ago
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
3 weeks ago
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
3 weeks ago
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
3 weeks ago
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
3 weeks ago
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."
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mr34
3 hours ago
