What I have discovered in my research of the current management indicates very poor performance over the past 10 years or more and many cases where there has been a misrepresentation of the truth in stock exchange reporting. Even the announcements to the ASX and TSX reporting the appointment of the MD for the last two positions are not truthful.
Without boring everyone to tears, some claims in the appointment announcements of Norregaard are just plain wrong:
The Trelawney ann. of the appointment of Norregaard is a classic…
“Mr Norregaard .. joined Western Australian - based Tectonic Resources NL as General Manager and subsequently Managing Director overseeing a turnaround in the company’s fortunes. Under his direction the company profitably exploited the RAV8 underground nickel mine, built the Burnakura Gold Project which was subsequently divested and oversaw the enhancement of the potential of the company’s ground holding in the Ravensthorpe region in Western Australia. Mr Norregaard oversaw the completion of a definitive feasibility study into the development of the resource.” (TRR 30/06/11)
• What? How does a turnaround in the company’s fortunes equal a ~68% loss in share price over the time at TTR? How does a turnaround equal closing every mine and selling every asset except for the only project that could not be developed? Who’s writing this stuff?
• TTR’s shareholders must have shared the same frustrations as TRR’s and RED’s when the MD made the decision to close the Burnakura Gold Mine after only 11 months of operation and only months after they built a new 90 person accommodation camp. You have to laugh when you see the endorsement by the MD of the retailer that sold them the 90 TV’s for the camp. “We purchased 90 TVs 6 months ago. Kogan have a quality product, achieved an excellent delivery time, have backed up their product and have done so with a minimum of fuss all at a cost effective price. Couldn't fault them. Steve Norregaard, Managing Director, Tectonic Resources” (http://www.kogan.com/uk/commercial-wholesale/).
• Burnakura wasn’t “divested”, as stated in the Trelawney ann. of 30/06/11. It was shut down because it was a failure and then they sold (divested) it 14 months after the decision to close it to get it off the books. Talk about putting a good spin on a disaster.
• And overseeing “the enhancement of potential” and “completion of a definitive feasibility study”? What? Tectonic’s Phillips River Definitive Feasibility Study (11/02/11) was completed AFTER the resignation of the MD and not before as indicated. The ann. is just untrue.
• But there are even more problems regarding this matter. It seems that TTR had completed a feasibility study as early as Nov 2005 when they announced they would go ahead with the project. Why then did they spend the next 4 years doing more feasibility work? The TTR shareholders must have been really annoyed! The net result? A ~68% reduction in the share price and the Phillips River project has never been developed.
• Interestingly the share price went up dramatically (almost doubled) immediately after Norregaard resigned from Tectonic.
So what of RED’s ann. of the appointment of Norregaard? More of the same:
“His career includes eight years as Managing Director of ASX listed Tectonic Resources NL and twelve years with Macmahon Holdings Ltd/National Mine Management Pty Ltd in various managerial capacities, including project manager, resident mine manager and operations manager at in excess of a dozen mines, culminating in over four years as General Manager – Macmahon Underground.
Most recently, he was Chief Operating Officer for Trelawney Mining and Exploration Inc. in charge of the development of the 8 million ounce Coté Lake gold project in Ontario, Canada, prior to the company’s acquisition by IAMGold Corporation” (RED 23/01/13)
• Trelawney’s (TRR.V) Cote Lake project was not a “development” it was an exploration project. Only 14% of the total resources were in a class that could be studied from a feasibility point of view so nothing could be ‘developed’. In any case the Qualified Person for the resources was another person (David Beilhartz). The only construction they reported was to build an exploration camp and put in a short power line (see www.SEDAR.com).
• The Cote Lake resource was 6.8 million ounces not 8 million as stated and was not upgraded until IAMGold completed more drilling and commenced feasibility studies.
• The RED ann. on 23/01/13 made the Trelawney position sound so important but in reality it was for only 8 months, 22 days until 26/04/12 when IAMGold made a successful takeover bid. Prior to that TRR managed to strip ~48% off the share price in less than 9 months during a period the gold price dramatically increased.
• “In excess of a dozen mines”? I can’t find one example of a quality mine that management has been involved in. Bendigo? Meekatharra? Mt Lyell? Burnakura? RAV8? Nothing to write home about in any of them.
• But the real clue as to what started all of this comes from MacMahon Contractors when Norregaard was managing the underground division. “The underground division performance was disappointing with returns below the required benchmark. However, as a result of actions taken by year end, margins were improving. – MacMahon Holdings Limited 2002 Annual Report”. What were the actions taken at year end? Norregaard was replaced by Nick Savage who spent the next 2-3 years getting the division back into the black with positive EBIT margins (from ZERO in 2002 to 3.5% in 2003, 7.9% in 2004 and 13.3% in 2005).
If the two appointment announcements are so flawed what does that say about all the other announcements over time?
jd
RED Price at posting:
10.0¢ Sentiment: None Disclosure: Held
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