Wednesday, November 18, 2009

SocGen goes crazy

Oh my! The end of the world is coming. Brought to you by SocGen and hat tipped by Clusterstock!

And of course, the resident European journalist bear, Ambrose Evans-Pritchard has the report here.

It basically says, buy gold, sell stocks and junk bonds, and prepare for 500 on the S&P.

Maybe Prince Albert has a Mayan Calendar also!

Get to 12/12/12 already!

But I suppose that's what happens to a firm when you have a kid lose $7.5 billion that you didn't know about!

You get used to pushing the panic button!

I'd put out the report, if I could just get one question answered by SocGen or Goldman Sachs--How much of AIG's swaps did they hedge amongst themselves?

Maybe SocGen should save that button for that!


Anonymous said...

Hey Palmoni,

10-Q form was filed.

What I got from it was that the merger ran into some technical issues and it is being restructured with the original terms with a deadline of December 31, 2009.

Also this line looks interesting
"Expected purchase or sale of plant and significant equipment."

We do anticipate the purchase of plant and/or significant equipment at this time during the next 12 months, as part of the GRP Merger and GV Acquisition.

Was this the news you were expecting or is there more to come? Thanks!

Palmoni said...

No--this is just the structuring of the shell--where the properties get merged into it.

It is a definite positive that they are saying that the properties will be merged into the shell as that is where the value lies.

When they talk about substantial capital being deployed and the 1.2 million acres of productive gold land--that is when the "substantial capital" will then come into play--but after the completion of the merger.

Complete the merger, and I'll start talking about the mineral estimates that the company has made, and which is in the process of being verified

The news that I was expecting is conditional on the completion of the merger.

You'll know that when it hits. 1.2 million acres? And show some audits on that acreage with proven gold reserves?

That will bring flies to it like honey.

But we just need the merger to be finished--that's what is holding things up

Anonymous said...

do we know if the merger is happening this year or just the next 12 months?

Anonymous said...

Is the merger being held up due to technicalities or are there individuals who are trying to derail things? I can understand if all the interested parties just want to make sure everything is done properly since it involves very valuable land!

This statement looks interesting:

As a result of input from Colombian counsel, Colombian accountants, US tax counsel, and US securities counsel, the parties to the above referenced transactions anticipate, and are currently pursuing the restructuring of the nature of the transactions as described in the Gold Resource Partners Merger Agreement and the Membership Purchase Agreement and Plan of Reorganization with Gold Ventures 2008 and Flat Holdings, to reflect the most efficient manner to resolving technical legal and accounting issues with the intent of retaining the original material terms of the Agreements.

Sounds like they are making sure to do things by the books.

Palmoni said...

It was to do things by the books--every share and piece of property had to be correctly accounted for. Ross Perot "measure twice, cut once deal"

Should be completed this year.

Anonymous said...

so this must have been the reason why the stock dropped below $5 a few months ago

Consulting Agreements

On August 19, 2009, we entered into a consulting agreement with an entity who agreed to provide the Company with corporate finance relations, corporate financial services, corporate finance and mergers and acquisitions with respect to the Company. The term of the agreement began in August 2009 and will terminate in June of 2010. Pursuant to the consulting agreement we agreed to compensate the Consultant with a monthly rate of $85,000 in form of shares of the Company's common stock at $5 per shares. Additionally, we agreed to issue a one-time installment of 200,000 shares of our restricted common stock. The 200,000 shares were issued on August 21, 2009.

Palmoni said...

as I understand it--That agreement was for a person that was going to put $20 million in the company on a creative financing via a derivative instrument that was to be listed on the AMEX, tied to gold...and then raise more money by a convert--but the people selling the assets into the shell didn't want the dilution--they after all, put up the money in the first place..and they were in at an adjusted price of 10 they went another way to get financing via the gold in the ground

so then they needed to prove out the reserves but those assets weren't yet merged into the shell

but these other investors wanted the assets themselves, and not merge them into the shell--but just a % of them

so now they need to close the merger of all the gold properties into the shell, so they can get the money from the gold in the ground..its the non dilutive way to raise money..and to give the shell assets--from 99,000 to 1.2 million acres--prove out gold reserves and you have a huge market cap

and if you look at the money that the company raised--I think about $4 million in the quarter--there were no broker concessions on that since it was done privately..

close the merger, and I'll be all over the stock..

then finish the property audits after they are in the shell! I've seen the company estimates, and other geological work and they are off the charts..but what good does that do me, unless they are merged into the shell?

and that's why the delay--you had people throwing money around at the properties, but they wanted the properties and they didn't want them in the shell

so finish the merger, bribe some officials to get it done like ocho did, and then we got a stock we can trade

Anonymous said...

Palmoni, thanks for all this's impossible to get any data that you're sharing and i really appreciate it. I don't have a lot of shares...200...makes up most of my roth...i know there is risk but it's a roth that i've lost 80% on earlier this year by going short.

it sounds like there is still high risk but i assume you wouldn't have audits, 10q's or k's without being serious about going on...if they dont merge then they don't need to go through all the formality of everything right?

thanks a lot for everything...whatever you decide to do on that offer from the hedge fund i'm very thankful either way. I know you set this up not to get hired somewhere but more to tell us the story and maybe just to have fun...maybe i'm wrong...if you take any offer...ask for 50% of profits with a high base and not have to share any losses.

hate to see you go and this blog end.

i don't have a lot of money in the market...reg trading acct only $2500 now but i've been able to wiggle slowly up with your was once at $15 and hope to be back there some day and when that day happens you'll be first to know

Anonymous said...

meant 15k not $15

Anonymous said...

Wow that's a classic case of greed! If these investors were just a small % then they wouldn't have much leverage since I'm guessing they weren't the ones with the Colombian gov't connections.

Congrats on the potential hedge fund offer. It's funny how opportunity comes knocking!