Our warmest congratulations go out to Daniele McCluskey, who on September 2nd and September 3rd sold 100,000 shares of Alamos Gold that she held for gross proceeds of one million and forty-one thousand four hundred and eighty three dollars.
As we can see from the chart, the timing of the trade was excellent, coinciding as it did with the 52 week high in AGI.to. It came just before the news on September 23rd that AGI.to was buying two Turkey assets from Teck/Fronteer that made the stock trade rather soft. It also came before the October 8th production update from AGI.to that disappointed the market and has seen the stock drop from $10.25 to its current $9.50. So great timed trade, Daniele, kudos to you! Darnit, I wish I knew how these people could time tops so well.....
Oh yeah, nearly forgot: By way of a totally unrelated fact, Daniele McCluskey is the wife of Alamos CEO, John McCluskey.
I really think that holding ten and a half loonies is a better bet than holding a share in my company.
Best wishes, John 'I Am Entitled' McCluskey.
Yep, he's at it again. Another 100,000 shares sold into the market (indirect holding via Daniele McCluskey this time), another million dollars plus banked by the head honcho of AGI.to. This guy is building an empire all right....selling his stock and building it elsewhere, though.
On more than one occasion over the last few months your humble correspondent has received mails from readers wanting an opinion on Ascot Mining (AM3 in Germany, ASMP in London UK). The first time I scanned it quickly and said "looks iffy" to a UK reader. Then a few weeks later a regular German reader/friend wanted to know more so I spent a couple of hours on it, wrote back with "UUUUGGHH! NOOOO! NEVER!" (with a couple of paragraphs to back that up) and since then the half-dozen or so other mailers have had their mails replied very quickly.
1) it's worth reading and I agree with every word 2) minesite is a free subscription service and reading the smarts on offer may give you enough reason to join up. It's 100% free to join (easy to join, too) and well worth the couple of minute's effort it will take you, rest assured.
So here comes Wyatt on Ascot Mining. Enjoy.
September 07, 2009
Beware Anyone Who Offers Gold At A Discount To The Ruling World Price
By Charles Wyatt
Ever heard of Ascot Mining? It’s a minimalist gold exploration company listed on London’s PLUS market. Over the weekend, and just when the gold price had had a busy week, the Financial Times Money Report chose to mention it. Not often the Pinker than Pink ‘Un mentions a small gold company, so old Minews thought he ought to give it the once-over.
Apparently Ascot Mining is going to start producing gold from some projects in Costa Rica in the indeterminate future. The following statement is taken direct from the company’s interim report to end March, which was published this summer. “Ascot Mining PLC is developing and rehabilitating previously producing gold mines in Costa Rica. It is close to producing gold at its three wholly owned subsidiaries, when they will generate substantial early cash flow.”
These are then listed as Vertias Gold, Veritas Mining, and Veritas Resources, containing respectively, amongst other properties, the Chassoul gold mine, the Tres Hermanos project, and the La Toyota Mine joint venture. The statement continues: “The board of Ascot prides itself on its prudent use of funds. However, last year, the company, along with the rest of the mining sector, was hit by steep rises in raw materials, fuel and other costs that far exceeded initial projections requiring additional funding to be raised. The company is now well positioned to speed up the move to Ascot becoming a gold producer with a significant cash flow.”
Mr David B Jackson, the chief executive, who claims to have had five years experience as a senior officer and director of two gold and base Metals Exploration companies which are unnamed, then goes on to give an update on operations. “The development of the Chassoul mine”, he says, “is significantly advanced and the company is currently developing sufficient tonnage of ore ahead of production. Once the mill circuit has been balanced, daily gold production is estimated at between 25 to 30 oz per day. Independent assays have officially certified results of up to 106.75 grams of gold or 3.43 oz per ton, which are in the upper levels of the expected range.” Phew!!!!!!
Mr Jackson goes on, “The contract for lining the tailings pond has been negotiated. Once the liner is installed and the refurbished crusher is delivered to the site the mill will be fully operational. Meanwhile Tres Hermanos, El Recio and the nearby Boston concession consist of a series of mines with tremendous scope to significantly increase the already known resources. Records suggest an average mining grade of 0.3 to 1.00 oz/ton can be expected, plus bonanza type chutes with far higher grades that are well documented locally. Gold production is planned to begin in 2009 at 30 to 35 oz daily based on the mill handling 50 tonnes per day. Power is available from a nearby existing hydroelectric power line. The Costa Rican Government's mining department has Ascot's proposal whereby tailings will be neutralized and pumped underground. This technique is environmentally beneficial, as it will stabilize former underground workings, and it is also cost effective. Production will be boosted by development of the nearby El Recio concession which is a near-surface resource of 22,500 ounces of gold with an estimated value of US$18,000,000 (at US$800/oz). Detailed satellite imaging is currently being interpreted by the company's consultants to identify further drill targets. A drilling program is planned to locate other as yet undiscovered gold veins and expand the known resources.”
That is enough for one day. You get the picture. Ascot Mining has gold projects far away in Costa Rica which it hopes to bring into production one day. No proper resource estimate: no feasibility study. The report does not reflect the plans of an experienced mine developer despite the fact that Ascot names a full cricket team of directors, executives and advisers. No details are given on any bar Mr Jackson , but Dr Michael Green who came on board as a non-exec last September was “a mining analyst for leading stockbrokers” at one time.
This is a company which is now proposing to sell gold to punters at a 20 per cent discount to the current price. Sounds good, doesn’t it? The catch is that this gold will not be delivered for at least a year, or never, if the mines do not come into production at a rate sufficient to meet the demand from these forward sales. They are limited to 7,000 ounces, and so far 1,596 ounces appears to have been sold to raise a total of US$1,083,656. On this basis the average price has been US$679.98 per ounce which, it has to be said, looks temptingly attractive with gold trying to break through US$1,000 per ounce.
Ask any experienced mining man, however, and you will find out just how difficult it is to bring a gold mine into production. Shareholders would want to see production running at at least 21,000 ounces per year if they are going to have to sell one third of production at this low price. So what happens if there is simply not sufficient gold being produced in a year to 18 months time to meet these forward sales? Even banks run into this problem with hedging programmes, but they then go for the assets of the company concerned to make sure they are not out of pocket. An individual can hardly do this, and anyway will have no charge over Ascot’s assets.
The other way to look at it, of course, is to consider where the price of gold may be in 18 months time. Sure, it could be at US$2,000 per ounce, but what if the dollar is strong again and interest rates are rising? Then it could be just US$680 per ounce, in line with a forecast made by one of the LBMA gold analysts at the beginning of this year. Then all that will happen is that the money, and Ascot Mining specifies a minimum purchase of 10 ounces which is around US$10,000, will have been lent to the company for nothing for that period.
It’s all best left alone is the answer, or as Leslie Parker the doyen of all the one-time mining editors at the Financial Times would have said: “Do not touch it with a barge pole.” In his time, moreover, the FT would not have given such a scheme the benefit of any publicity, but times have changed. None of the contact telephone numbers given for the company were answered by Mr Jackson or anyone else.
And you'd be smiling, too. John McCluskey (for it is he)
Hey, remember that Countrywide dude Angelo Godzilla or whatever his name was? Remember how he sold great big chunks of his own stock in those heady days before the financial crisis? Remember how his sycophants would justify this very suspicious insider selling by telling us how Godzilla was this successful dude and deserved the fruits of his labours and all that jazz? Then remember what happened to his company? And then all that nuisance about trials for fraud, and jailtime, and angry shareholders that had lost the lot? Yeah I remember all that, too, which is why John McCluskey over at Alamos Gold (AGI.to) has got my attention right now.
Y'see, McCluskey isn't just selling a few shares to raise a bit of moolah in order to supplement his meagre $500,000 annual pay package, he's on his own little non-stop selling spree and has been at it all year. Here's a paste-out of all his insider transactions so far in 2009.
1363933 2008-12-29 2009-01-26 Direct Ownership : 10-1,0008.8440 542,400 disposition in the public market
1363936 2008-12-29 2009-01-26 Direct Ownership : 10 -9,000 8.8630 533,400 disposition in the public market
1363937 2008-12-31 2009-01-26 Direct Ownership : 10 -10,000 8.6390 523,400 disposition in the public market
1363938 2009-01-06 2009-01-26 Direct Ownership : 10 -5,000 7.4380 518,400 disposition in the public market
1363939 2009-01-08 2009-01-26 Direct Ownership : 10 -1,400 7.8500 517,000 disposition in the public market
1363940 2009-01-09 2009-01-26 Direct Ownership : 10 -8,600 7.9230 508,400 disposition in the public market
1363941 2009-01-15 2009-01-26 Direct Ownership : 10 -100 8.1020 508,300 disposition in the public market
1363943 2009-01-15 2009-01-26 Direct Ownership : 10 -4,900 8.1120 503,400 disposition in the public market
1363944 2009-01-16 2009-01-26 Direct Ownership : 10 -5,000 8.3000 498,400 disposition in the public market
1363947 2009-01-19 2009-01-26 Direct Ownership : 10 -2,500 8.4500 495,900 disposition in the public market
1363950 2009-01-20 2009-01-26 Direct Ownership : 10 -2,500 8.6000 493,400 disposition in the public market
1363967 2009-01-22 2009-01-26 Direct Ownership : 10 -100 8.5400 493,300 disposition in the publicmarket
1363969 2009-01-23 2009-01-26 Direct Ownership : 10 -4,900 8.5100 488,400 disposition in the public market
1439330 2009-04-13 2009-06-13 Direct Ownership : 10 -100 8.4900 488,300 disposition in the public market
1439331 2009-04-27 2009-06-13 Direct Ownership : 10 -1,800 8.4900 486,500 disposition in the public market
1439332 2009-05-28 2009-06-13 Direct Ownership : 10 -2,000 9.7510 484,500 disposition in the public market
1439333 2009-05-29 2009-06-13 Direct Ownership : 10 -3,000 9.8600 481,500 disposition in the public market
1444655 2009-06-22 2009-06-25 Direct Ownership : 51 - Exercise of options +200,000 2.2500 681,500
1444656 2009-06-24 2009-06-25 Direct Ownership : 10 -100 9.7820 681,400 disposition in the public market
1444657 2009-06-24 2009-06-25 Direct Ownership : 10 -100 9.7800 681,300 disposition in the public market
1444658 2009-06-24 2009-06-25 Direct Ownership : 10 -14,800 9.7720 666,500 disposition in the public market
1449427 2009-06-25 2009-07-06 Direct Ownership : 10 -35,000 9.7160 631,500 disposition in the public market
1449429 2009-07-02 2009-07-06 Direct Ownership : 10 -26,000 9.7750 605,500 disposition in the public market
1449431 2009-07-03 2009-07-06 Direct Ownership : 10 -24,000 9.8000 581,500 disposition in the public market
1458403 2009-07-17 2009-07-24 Direct Ownership : 10 -300 10.0230 581,200 disposition in the public market
1458404 2009-07-17 2009-07-24 Direct Ownership : 10 -74,700 9.8700 506,500 disposition in the public market
1458405 2009-07-20 2009-07-24 Direct Ownership : 10 -25,000 10.3010 481,500 disposition in the public market
1458406 2009-07-21 2009-07-24 Direct Ownership : 10 -3,300 10.2300 478,200 disposition in the public market
I haven't missed out any transactions here, by the way. Apart from the one time when McCluskey topped up his dwindling holdings by exercising a bunch of $2.25 options (to sell at 9 and 10...nice work if you can get it, huh?) all he's done is sell, sell, sell. Makes you wonder if he's had time to do any actual work, doesn't it?
So far this year (according to my Casio, at least) McCluskey has put a gross value of two million, five hundred and thirty-one thousand, three hundred and forty dollars and fifty cents ($2,531,340.50) into his back pocket by selling shares to a largely unsuspecting market. Now I dunno 'bout you but putting it as mildly as possible that does seem a little excessive for the CEO of a junior gold play, especially for a guy who pulled down $500,000 as his salary last year and another 200k in bonuses. So if you happen to bump into John McCluskey, ask him why he's so keen on selling out right now. And while you're at it, ask him what he's spending the large cash on because he clearly sees there are better places to invest his money than his own company.
Any professional analysts at the Can'o'corn feeling stupid about pumping the Exeter Caspiche story yet? Cerro Casale is just down the road from Yale's dog of a project, remember. Same rocks, same grades, same lack of water, same altitude...same same same. (Hint to Mr Z; Next time you go on a site visit make sure you leave the comfort of the deluxe hotels and spend more than four hours at the mine site.
Oh, then there's that dubious Volcan under Andina Minerals (ADM.v). Same place. Then those utter criminals at Capella (KPS.v). Same place. As mentioned many times before not all gold ounces are the same, so check out below what Kinross and Barrick have suddenly discovered! My, doesn't it remind you of that Noront Ring of Fire thing from a couple of years ago.......
A key development project for mining giants Barrick Gold Corp. and Kinross Gold Corp. has run into massive capital cost escalation, raising more doubts from experts that it will get built any time soon.
The project in question is Cerro Casale, a huge, low-grade gold-copper deposit in northern Chile. Kinross filed a technical report this week that pegged the construction cost of the project at a whopping US$3.6-billion.
That is an increase of 86% over the last estimate of about US$2-billion, made in August, 2006.
"This number is obviously going to have pretty big implications," said Dundee Securities analyst Paul Burchell, who used to work at Cerro Casale.
"It suggests to me that a project difficult to justify five years ago is probably more [difficult] today."
Experts are also concerned with the aggressive pricing assumptions made in the Cerro Casale study. Kinross is using a gold price of US$725 an ounce and a copper price of US$2 a pound, which is actually higher than the current copper price.
"It's a tough project economically because of the capex and the prices required to make it work. In this market, it will probably be deferred," said David Whetham, a resource fund manager at Scotia Cassels.
.....the chart for Yamana Gold (AUY), because it didn't just beat the street last night, it kicked its butt bigtime. This simple 12 month chart surely gives it room to rise, too.
AUY is a funny fish to estimate and gives insto analysts real headaches. They never seem to "get" Yamana, due mainly to its fluctuating financials more than any pleasant or unpleasant surprises on actual production. Over the years it's also been a frustrating stock to own, which is why I've never held it except for short, trading periods (and never made much money on it, for the record...probably a net loser personally).
But yesterday's really came in well; cash cost was on target, there were no significant write-downs, at the 4q08 eps of $0.25 beat the average consensus of $0.04 into a cocked hat. The company also made clear in its presser that its plans to increase gold (eq) production to 2m oz per year in 2012 are on course. That compares to the 1m oz Au it produces right now and clearly indicates that AUY will be on the acquisition trail soon enough. I still say AUY will buy JAG (been saying it since December), but repeat to stop potential mailers that there's no inside knowledge happening around that...just my own, personal call that can be shot down in flames at a later date.
So the bottom line is: great quarter at Yamana. I've never been a great fan of the stock but credit where it's due. I enjoy those moments when facts prove me wrong.
Hey there Canadian readers, remember back on January 27th when I posted this on the blatant insider trading at Alamos Gold (AGI.to) and Plexmar Resources (PLE.v)? Well I'm not just mouthy here y'know, I actually sent the thing in to Canada's OSC. For those unaware, the OSC is the Canadian version of the SEC, i.e. the people that are supposed to regulate the securities industry up there. The OSC's track record is nothing short of abysmal, having (for example) managed to convict just two people in the last nine years. Not bad for one of the world's most corrupt and crony-ridden capital markets, yeah?
So anyway, I'd all but forgotten that I had put in a complaint to the OSC when suddenly, today, five weeks later (!) I get a reply. Here it is below, but you can sum up Allan Krystie's attitude in just one sentence:
"I don't care, I'm doing nothing, stop bugging me."
Dear XXXXX: Thank you for your inquiry to the Ontario Securities Commission (OSC) concerning Plexmar Resources Inc. and Alamos Gold.We have forwarded your complaint to the enforcement branch of the OSC for further review. This may or may not result in an investigation; however, Commission staff do not generally comment on the existence, status, or nature of an investigation. The purposes of this practice are to protect the integrity of investigations, to ensure the complaint process is not used to affect the market and to provide fairness towards those who are the subject of investigations, but against whom proceedings may never be taken. If additional information is required from you, staff will contact you; however, you may hear nothing further. Sincerely,
After a couple of hours reading reports, PRs, blogs and things I'm feeling a little more up to speed on the week past (interesting uplift in financing action, eg PAAS, CGK.v, DMM.to, OSK.to, Argentine soybean forecast just dumped 7MMT to 42.5MMT the FCC.to PCU white knight deal is only 10% higher than the one dismissed out of hand in December etc etc etc)
However, I got a kick out of this report by Andy Hoffman in Canada's Globe&Mail dated 28th Jan that picked up on this humble scribe's musings of Jan 27th and made the CEO of Alamos Gold (AGI.to), John McCluskey, squirm like the veritable worm. Hoffman did a good job of getting McCluskey to say silly things concerning his blatant insider trading that came just days before a significant PR that dumped the company stock price. Hoffman's piece is subscriber-only, but here's an excerpt from the note:
"The chief executive officer of Alamos Gold Inc. sold 60,000 company shares in the month before unveiling a $75-million bought deal financing, according to insider trading data filed with securities regulators, but he denies he sold the stock with any knowledge of the pending financing.
In a series of transactions beginning Dec. 22 and culminating on Jan. 23, John McCluskey sold shares of the gold producer for prices ranging between $7.43 and $8.86.
Among the trades was the sale of 4,900 Alamos shares for $8.51 on Friday. Yesterday, Alamos announced the financing that will see the Toronto company issue 9.4 million shares at $8 each. The stock fell 6.4 per cent on the Toronto Stock Exchange.
In an interview, Mr. McCluskey said that while investment bankers had been pitching Alamos to do an equity financing for more than a month, he only decided to give the go-ahead for the offering on Sunday night.
Until that decision was made, Mr. McCluskey said he had not been planning to issue shares in the company, which produces about 150,000 ounces of gold a year at its Mulatos mine in Sonora state, Mexico.
"If you think that I would sell off all my stock ahead of a financing with the full knowledge I was about to do a financing, you must think I'm crazy. Frankly, that would be illegal. That would be a violation of securities laws," he said."
Isn't it amazing that McCluskey thinks we're the freakin' idiot crazies to even suspect his motives? Isn't it cool to note that he thinks we need informing that his actions may have been construed as illegal? Isn't it a marvel that he gets his arm twisted by a firm of investment bankers on a Sunday?
The lady doth protest too much, methinks.
The plain fact is that McCluskey got the light shone on him (by this very blog and then G&M) doing the same kind of bullshit shareholder skimming that half the stocks in Canada do. And as this note on the "conviction" of an ex-Agnico Veep done for insider trading points out, there has only been one jail sentence (for a measly 45 days) for insider dealings passed in Canada since the millenium started. That just goes to show how mind-numbingly toothless the OSC really is as the guardian of one of the world's most corrupt and cronyist stock markets.
As for the pathetic caught-with-pants-down McCluskey, add his attempt at covering his tracks to the previously demonstrated deception. Just another reason to avoid him and his overpriced company.
The chart from yesterday's post is now doubly true
I actually got a couple of pretty cool hatemails for this note yesterday(though one was rather over-fixated on all things anal) in which your fed-up-with-Canadian-scamsters Otto pointed out how Plexmar (PLE.v) management was treating its own shareholders by insider selling on the same day it announced (seemingly) positive news. As part of the note I also wrote, "You can't help but wonder how many more insiders are left to file their trades, eh M. Bedard?"
Four hundred and forty-five thousand, to be exact. Now how on earth did I guess that was going to happen..............?
Now for part two, Alamos Gold (AGI.to)
John McCluskey: You know you can trust him because he's smiling at you
And here's another company for the rogues' gallery of scam-laden management. Check out Alamos Gold's (AGI.to) Prez&CEO John McCluskey's inside sales in January.
Jan 26/09
Jan 23/09
McCluskey, John
Direct Ownership
Common Shares
10 - Disposition in the public market
-4,900
$8.510
Jan 26/09
Jan 22/09
McCluskey, John
Direct Ownership
Common Shares
10 - Disposition in the public market
-100
$8.540
Jan 26/09
Jan 20/09
McCluskey, John
Direct Ownership
Common Shares
10 - Disposition in the public market
-2,500
$8.600
Jan 26/09
Jan 19/09
McCluskey, John
Direct Ownership
Common Shares
10 - Disposition in the public market
-2,500
$8.450
Jan 26/09
Jan 16/09
McCluskey, John
Direct Ownership
Common Shares
10 - Disposition in the public market
-5,000
$8.300
Jan 26/09
Jan 15/09
McCluskey, John
Direct Ownership
Common Shares
10 - Disposition in the public market
-4,900
$8.112
Jan 26/09
Jan 15/09
McCluskey, John
Direct Ownership
Common Shares
10 - Disposition in the public market
-100
$8.102
Jan 26/09
Jan 09/09
McCluskey, John
Direct Ownership
Common Shares
10 - Disposition in the public market
-8,600
$7.923
Jan 26/09
Jan 08/09
McCluskey, John
Direct Ownership
Common Shares
10 - Disposition in the public market
-1,400
$7.850
Jan 26/09
Jan 06/09
McCluskey, John
Direct Ownership
Common Shares
10 - Disposition in the public market
-5,000
$7.438
That little lot adds up to 35,000 shares and a gross cash total of $283,554....and eighty cents. And amazingly, astoundingly, coincidentally enough, all these sales came just before AGI.to announced a bought deal placement for 9.4m share at $8 that intends to raise $75m for working cap for its Mexico operations.
1/26/09: Alamos Gold Inc. (the "Company")(TSX:AGI) has announced today that it has entered into an agreement with a syndicate of underwriters led by BMO Capital Markets under which the underwriters have agreed to buy on bought deal basis by way of a short form prospectus, 9,400,000 Common Shares (the "Common Shares") at a price of $8.00 per Common Share for gross proceeds of $75,200,000. The Company has granted the underwriters an option, for a period of 30 days following the closing of the offering, to purchase up to an additional 15% of the Offering to cover over-allotments, if any. The net proceeds of the offering will be used for working capital and general corporate purposes. The offering is expected to close on or about February 17, 2009 and is subject to yada yada continues here
So let's see how that news has affected AGI.to's stock price today:
Oh Mr. McCluskey! What lucky timing you have with your sales! So mark AGI.to down as another bunch that will screw shareholders without a moment's thought. By their deeds shall ye know them.
As we can see from the chart, the timing of the trade was excellent, coinciding as it did with the 52 week high in AGI.to. It came just before the news on September 23rd that AGI.to was buying two Turkey assets from Teck/Fronteer that made the stock trade rather soft. It also came before the October 8th production update from AGI.to that disappointed the market and has seen the stock drop from $10.25 to its current $9.50. So great timed trade, Daniele, kudos to you! Darnit, I wish I knew how these people could time tops so well.....
