Monday, February 27, 2006
Strathmore emphasizes the badness of bad news
I've drawn on a satellite map of the area to attempt to highlight what I believe is the property they're talking about. The map is here with a closer map of Ft McLeod here. You'll see a red dot in the lower right showing Fort McLeod. The red rectangle seems to be the area. I'm no geologist, but based on their description, the valuable part of the property is probably the eastern edge with is next to Willow Creek which runs just to the west of the string of towns Granam, Claresholm, Stavely, and Nanton.
After 7 paragraphs of wonderful glowing rambling statements, they end it by mumbling something very quick about the joint venture deal with North American Gem, Inc. being called off after the letter of intent on August 18, 2005.
Separately, the Company announces that the letter of intent signed with North American Gem Inc. on August 18, 2005 did not proceed.Do they really think this works? By making such an obvious ploy, they're actually emphasizing that it's bad news. If it was good news, they would have said how they terminated the deal because the terms weren't very good and that they'll hold out for something better, which would be believable with the price of uranium continuing to go up. The price went up another 75 cents last week to $38.25 (by the way, UXC has a great article about how the price increase of U3O8 was more than just speculation). Portraying this as bad news makes it seem even worse.
I wasn't particularly happy with the NAG deal.
To earn its 50 per cent interest in the Hall Lake Project, NAG must make an initial cash payment of $150,000 to STRATHMORE. Furthermore, NAG must also advance $400,000 for property exploration costs before October 15, 2005 and an additional $600,000 before September 15, 2006. Upon completion of the second year expenditures, the companies will form a joint venture to continue the exploration of the project. STRATHMORE may buy back a 1 per cent interest in the project by issuing 25,000 shares to NAG.If NAG can get 50% ownership of Hall Lake for a total of $1.15 million, does this mean the whole Hall Lake property is only worth $2.3 million?
And then Duddridge Lake:
To earn its 50 per cent interest in the Duddridge Lake Project, NAG must make an initial cash payment of $150,000 to Strathmore. Furthermore, NAG must also advance $250,000 for property exploration costs before April 30, 2006 and an additional $450,000 before April 30, 2007. Upon completion of the second year expenditures, the companies will form a joint venture to continue the exploration of the project. STRATHMORE may buy back a 1 per cent interest in the project by issuing 25,000 shares to NAG.So Duddridge Lake is worth $1.7 million? Of course the acquisition cost was 200,000 shares total which would be less than US$400K. Needless to say, if they monetized all of their properties at this rate, it wouldn't be so good.