Good anyalisis of and improvement on my previous posts....on...

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Gpoe

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02/10/22

10:20

Post #: 63986171
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Originally posted by RiskArb: ↑

Terrible proposals IMO:

1. Villasrubias
- Bad deal, bad-timing and a low-grade, speculative asset
- License is worth $400k. Fair enough, though DM likely paid much less. Is his purchase price disclosed?
- If you support the purchase, then GGG's $3mm investment should earn it a stake worth 88% or thereabouts, not 51%.
- This appears a sweetheart deal to the MD that gets his personal project fully scoped-out for $3mm and with 49% of the resulting upside.
- Did the board undertake a global review of available assets and choose this as the best and on the best terms?
- The board looks really bad with this one and kiss the $3mm goodbye.

2. Name Change

- Horrible name. It unnecessarily pigeon holes the company and energy transition may have a very cold winter
- Also, would you rename google "Search Engine Company" or Exxon "Oil & Gas Company"?
- Pick a name that's not trend-chasing and enables the company to be opportunistic across any mineral over the commodity cycle
- Speaking of which, we're entering a global recession and with inflation on the boil and financial markets in a tailspin. Being overtly "energy transition" in this environment is poor timing as that's going to hit pause and the upside could very well be from inflation hedges.
- Pick a name retains flexibility of the company to be opportunistic.

3. Non-ED Remuneration
- Too early to be raising salaries esp with only bad news to date. $400k/year is generous for a company at this stage in development. $250k the norm.
- Option grants for getting litigation funding? That's an ordinary course of business affair. Strike
- Option grants for upsizing ANY resource by 20%? That's a heist. Can easily manipulate resource through inferred category and the grade cut-off and that's not a productive use of company $$$ at this time.
- Overall, we want execs to be well incentivised, but these milestones are garbage and VWAP on a retail driven stock is readily manipulated with news pumps and "market making". We need incentives linked to two things: 1) Arbitration win / mining license; and 2) production / cashflow. Anything else is secondary.

4. Consolidation of Capital
- Counterproductive. This is a retail driven stock and for now, will only appeal to retail investors. Why do a consolidation and make it less attractive to retail?

Overall, my corporate governance alarm bells are starting to twinge a bit.

The Villas deal is really bad. Add the pay increases and loose incentives and this is looking like a managed dissipation of funds.

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Good anyalisis of and improvement on my previous posts....on this subject

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