Open letter to Management
I'm sure the NR has already been written for tomorrow's (this week's - fill in the blanks) announcement that the BFS has been delivered to Teck and the 120 day clock has started. However, we all know that by management's nature or by design, the public relations for our share price has been very conservative and less than sterling, resulting in the dismal .80 cents range we are currently enjoying. So I think it is time for broader enlightenment of our Company's position and potential. If our AG board has trouble with all the Teck option intricacies and what the BFS means, then the average retail investor will have even less of a clue and be wary of investing at all. Whether we have EE making the decision or not, we need our share price higher and more reflective of our potential. So here, before the release, for management and our lawyers' consideration, are some points I hope we more fully explain in the News Release. I'm sure others will add to this list, and I hope Jason will at least pass it on as representative of our concerned and loyal retail investors.
- Fully explain the impact of our new ownership in the Liard shares, what it means to us in terms of a direct net profits interest in the Schaft Creek going forward - my goodness you might want to even go so far as to say it is 24.+whatever percent of the 21 year expected mine profits as an example
- Fully explain the effect on converting the 171 million waste tons (and $1.2B cost) to a reasonable M+I based on conservative grading and what that might do to the mine life extension and the IRR
- Fully explain that the resource deposit the BFS is based on is still open for mineral expansion to the east, north and at depth, plus there may be a further 5-6 deposit extension targets in the Schaft Creek deposit alone, plus there appears to be a new and possibly separate Discovery zone deposit
- Mention that the BFS is based on less than 2% of the lands held by CUU, and that we own additional lands outside of the Teck Option Agreement which also include the proposed Mess Creek road access to Schaft Creek that we are free to sell at a negotiated price as part of the Option Agreement, or retain in our Company for further exploration or to be included in a third party sale - and why not mention what has already been stated - management prefers to sell it's interests for a fair and reasonable rather than retain it
- Fully explain that Teck now has 60 days to form a Joint Venture with CUU to manage the Schaft Creek mine. Now it's always assumed that Teck would be the operator, but if Teck chooses 20% or 40% - why would we automatically let them control the mine, when a Third Party major might be in the driver's seat by buying us out. It appears Teck will have to make their decision within the 60 day timeframe, because I can't see us giving control away in the JV if the 20/40% options are exercised. It hinders the sale value of our 80/60 remaining interest. So realistically, Teck's decision will come within the JV timeline.
- Mention the huge insider ownership and continued support of the Board and management - always a great sign to the retail investor - follow the money.
Management is conservative by nature, but it may be time for a more promotional approach to the information disemination, perhaps less detailed geology. The market clearly doesn't get us at the moment, and needs to be shown the potential upside. There should be no problem including some of the great positive statements and "management's speculation" that were made during the public conference call. We don't owe Teck anything at the moment. This is about Company value and showcasing our potential.
I think they need an open discussion with Vette or some of the other informed shareholders as to what they think is required in this next NR - a very important one. Feel free to add to this list!
It's worth noting that based off WRN's new royalty buy back that our 6.6% retained royalty (Teck chooses the max buy back of 75%) is worth about $60 million per %. 1. This is an adjusted figure. 2. The deposits are nearly equal. (CUU has a much larger potential but WRN has a much lower strip ratio etc.)