Good post JRH350. From my groups talk with management...

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Motorheadbeany

1,245 Posts.

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02/05/17

12:38

Post #: 24408726
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Originally posted by Jrh350 ↑

Okay so 0.001 is clearly the bottom in terms of SP and we all know the massive potential upside. But let's consider the other possible risks that an insider could know:

Consolidation:
The company may be planning to consolidate the shares and so they are planning to get out now and come back in after the share price falls further. This seems like a bad time to consolidate unless the company was foreseeing extended delays and wanted to capitalise on the SP before it dropped. Better times for consolidation would be after the price skyrockets on great drilling results (best case) or they could do it as news of drilling results were imminent after there was some significant build up.

Insolvency:
With the delays on permit approval it is possible that the company will have difficulty managing costs due to cash burn. Again if these delays were forecast to be long enough then the this could force another round of capital raising or possible insolvency if there wasn't enough uptake. This one again hinges on massive delays but is a possibility. It would be possible to reduce the number of drill sites before running out of money as a plan B. Though we are currently holding $1.6m in cash and our cash burn was 600k last quarter so I think we probably have a little time up our sleeve.

Failed Drilling Approval:
This one is the biggest concern and perhaps someone who was familiar with this application process may be able to fill us in on the likelihood of a rejection. Most processes like this do have avenues for appeal but can end up in protracted legal battles and we don't have the money or therefore time to see it through. If this were the case then we could expect to see an announcement today or tomorrow indicating that this had happened.

Any other thoughts/views on this would be greatly appreciated.

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Good post JRH350. From my groups talk with management Consolidation may or may not take place and it wont happen until share price is over at least a cent. Insolvency is an issue in the long term but most of us will wait for another two weeks. Failed Drilling approvals would be rare in a desert like Nevada. while environmental and other issues may hold up drilling, Approval will most likely always be granted to explorer. There is just to much profit for the state of Nevada to reject. cheers

CAD Price at posting: 0.4¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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