The guy Buffett once said that 'only when the tide goes out do you discover who's been swimming naked', which may not be a perfect fit on what follows here but it sure does come to mind. We're going to return to the subject of Dorato Resources (DRI.v) but bear with me one more time because although ostensibly about DRI.v it's much more about the shady underside of Canadian Capital Markets and the people with voices of influence therein.
The recent travails of Dorato (DRI.v) with the Peru government and the locals around its Cenepa-based exploration project have shown that the company has been spouting utter bullshit about its supposed good relations with said people. Now that its operations have been indefinitely suspended by the highest authorities in the land (i.e. Cabinet Ministerial level) and with flat zip zilch zero chance of Peru changing its mind on this (reasons previously explained) you might have expected analysts and brokerages to advise clients to either avoid DRI.v like a nuclear fallout zone or if they were bought in to sell before too much damage is done.
Strangely, the news out of Peru has been largely met by a roaring silence from expert analysts (loosely used term here). Nary a word from the people at the can of corn, for example, who spent the latter part of 2009 pumping up the stock, using phrases like "the next Aurelian" in its Morning Coffee publication on several occasions, making wild rah-rah noises when DRI got its permits for a very limited drilling campaign and then (hey wow coincidence!) heading up the syndicate that ran two placements for DRI.v at $1.05 and raising nearly $15m for the company just days before the ceiling came crashing in.
Why should it be that suddenly Dorato Resources is not mentioned by the Canadian brokerage community? Why oh why oh why?
Would the following have something to do with it? Back in late 2007/early 2008 (you can see where on that chart above...before it all kicks off), Dorato Resources ran its $0.60 seed capital financing. A total of 17m shares were placed by the company, and amongst the people that bought in, here are a few of the names (and their jobs in 2008 or perhaps a little earlier) and the amount of DRI stock they bought:
The recent travails of Dorato (DRI.v) with the Peru government and the locals around its Cenepa-based exploration project have shown that the company has been spouting utter bullshit about its supposed good relations with said people. Now that its operations have been indefinitely suspended by the highest authorities in the land (i.e. Cabinet Ministerial level) and with flat zip zilch zero chance of Peru changing its mind on this (reasons previously explained) you might have expected analysts and brokerages to advise clients to either avoid DRI.v like a nuclear fallout zone or if they were bought in to sell before too much damage is done.
Strangely, the news out of Peru has been largely met by a roaring silence from expert analysts (loosely used term here). Nary a word from the people at the can of corn, for example, who spent the latter part of 2009 pumping up the stock, using phrases like "the next Aurelian" in its Morning Coffee publication on several occasions, making wild rah-rah noises when DRI got its permits for a very limited drilling campaign and then (hey wow coincidence!) heading up the syndicate that ran two placements for DRI.v at $1.05 and raising nearly $15m for the company just days before the ceiling came crashing in.
Why should it be that suddenly Dorato Resources is not mentioned by the Canadian brokerage community? Why oh why oh why?
Would the following have something to do with it? Back in late 2007/early 2008 (you can see where on that chart above...before it all kicks off), Dorato Resources ran its $0.60 seed capital financing. A total of 17m shares were placed by the company, and amongst the people that bought in, here are a few of the names (and their jobs in 2008 or perhaps a little earlier) and the amount of DRI stock they bought:
- Ali Pejman, MD Investment Banking, Canaccord Capital, 225,000 shares (125,000 shares directly, 100,000 via his wife Kirsten)
- Wendell Zerb, Senior Metals and Mining Analyst, Canaccord Capital, 40,000 shares
- Graham Currie, (via an investment in his wife's name, Cheryl), Senior VP Investment Banking, Canaccord Capital, 75,000 shares
- Neville Dastoor, Mining Analyst at Canaccord Capital until 2006, 10,000 shares
- Matthew Gaasenbeek, Head of Capital Markets N.Am, Canaccord Capital, 50,000 shares
- Graham Saunders, Head of Canadian Institutional Sales, Canaccord Capital, 35,000 shares
My stars, a lot of names attached to the can of corn, no? Whatever can it all mean????? But wait, there's more! The role call isn't confined to just that one house:
- Gary Bogdanovich, Investment Advisor, Haywood Securities, 285,000 shares
- Lorinda Hoyem, Investment Advisor, Blackmont Capital, 50,000 shares
- Dino Minicucci and Cal Everett, respectively Investment Advisor and Institutional Sales, PI Fincorp, 365,000 shares (via holding company 0811321 BC Ltd)
- Linda Yule, Senior Investment Advisor, GMP Private Client, 100,000 shares
Forgive me if I missed a couple of names along the way, the full list of people taken in by DRI was long at 160 people. I also have no information on whether these people have held through on their purchases until today or whether they've either partly or fully disposed. But the point is that all these investment advisors, brokerage bankers, insto sales people etc etc are or were long DRI, so how on earth are they supposed to give people unbiased and straight advice on this scam if they have vested interests? For example, the Pejman family's holding in DRI.v (assuming ceteris paribus) was worth $303,750 less than two months ago and now it's down to just $146,250 thanks to the recent outbreak of reality as concerns the company's deeply problematic social issues (that haven't just sprang suddenly from nowhere, as the IKN series of posts make crystal clear).
This DRI.v episode is just part of the underbelly of Canadian capital markets, one small glimpse into what goes on behind the scenes. A company like DRI soft-soaps a whole sector of people with influential voices and gets them on their vested interest side. Then they can't say anything out loud and in public when the whole shebang falls apart. Dorato Resources (DRI.v) is a company that's now dead in the water with no chance whatsoever of ever building a mine or selling its assets to a higher bidder. It's done, finished, kaput, be in no doubt. But the people listed above and all their friends and colleagues aren't going to tell you that....for more than one obvious reason.