So what's going on over at Aquiline (AQI.to)?

The company has been tight lipped about things, but according to this Spanish language report from way down Chubut Argentina way and dated the morning of Thursday, 21st May, the Environmental Impact Study submitted by AQI.to to the provincial government of Chubut has been rejected and they have a maximum of 60 days to come up with a better idea.

In the news report, Chubut's Environment Minister Juan Garitano tells a local radio station that "the updated report of environmental impact (for Aquiline) mentioned in the reference is not in conditions to be approved for the environmental aspects it refers to, as it does not comply with the sufficient technical requirements for the stage in which it finds itself."

It never fails to amaze me that mining companies forget to mention these things to their shareholders. I mean, screwing up an EIA, getting a red light from the local bigwigs and putting the whole project at risk is probably something they'd like to know, dontcha think?

Thanks to reader M for the headsup on this.

Aquiline (AQI.to): The Canadian pissing contest continues

Here's a follow up to last week's post on Aquiline (AQI.to) as we shed a further tear and pity poor, hard done by Aquiline (AQI.to) being used as a football by competing Canadian houses.

Well, not really. Pity is a real exaggeration as AQI's management are fully responsible for the current low cash "somebody please buy us" situation. However what is clear is that there are two factions playing financial games with AQI's stock right now.

• In the red corner we have a whole buncha suits that want to drive AQI's stock price down because they know the comapny needs to raise capital soon and they want to get in cheap (put simply they'd like to see AQI raise $10m by selling 6.66m shares at $1.50)

• In the blue corner we have those already bought in that want to see their holding rise in value and don't want to see the company dilute too heavily on the next financing round (put simply they'd like to see AQI raise $10m by selling 4m shares at $2.50).

What these two bickering parties have in common, of course, is that they want AQI to go up in value AFTER the next round of financing. That's when this humble corner of cyberspace will be looking more closely at AQI as an investment, by the way, but until then it's fun to watch the boyz and their games (fun for a wonk like me, anyway).

The latest round comes from the blue corner today. Cormark published a report on AQI that I've had chance to read. I generally agree with their take on the company and consider it a good report. I don't know where the devil you, kind and gentle reader, can get a copy of this member's only analysis. Not a clue.

Oh, by the way my e-mail address is otto.rock1 (AT) gmail (DOT) com if you ever feel like dropping me a line...about anything at all.

Aquiline (AQI.to): No cash = No Control

This time last week, Aquiline (AQI.to) announced a 40% rise in its resource (M+I) at its Navidad Silver/Lead/Zinc project in Argentina. All very nice and prospective for sure, and one fine day this resource will surely become one of the biggest silver mines out there, especially as the jungledrums are positive about the local Argentine bigwigs relaxing their mining ban in the region shortly.

So why has the stock sold off so sharply since then?


Answer: Got no cash.

At YE2008, AQI reported total assets of C$140m, but only C$8.5m of that was in the current asset column. Or in other words they're short of readies and therefore at the mercy of the sharks-in-suits that populate the Toronto exchange. Those sharks know that AQI.to from here has two options....

1) Find a buyer
2) Raise more capital via placement

...and as everyone's most likely buyer of the project, Pan American Silver (PAAS) isn't flush with cash itself right now and having its own (not desperate but significant) version of cash flow issues, the buying option has faded into the distance. For the time being, at least.

So what we're witnessing right now is a bunch of sharks operating in cahoots. they want to push AQI.to stock down so that when the placement happens, it happens at a significant discount to the stock's "true worth" (whatever that may mean...it still confuses me after all these years). The sharks want to scoop up as many cheapo shares as they can, y'see. It's nothing more than attacking weakness..sharky is as sharky does.

Moral of the story: Junior miners are still suffering from the lack of credit available in the market, despite the bounce back from Oct/Nov'08 lows that we've seen. It's still impotant for you, the retail investor, to make sure that any potential investment isn't exposed to the whims of the Toronto crooks-in-suits. That means you want to buy companies with a decent cash position.

Aquiline Resources (AQI.to): Southern scuttlebutt

First the facts: Aquiline (AQI.to) came out with this PR today that sets the company up nicely for its new 43-101 resource due out next month (according to the PR at least). The drilling campaign has clearly been a good one and the company conveys the feeling that the resource is very close to full definition now. The Navidad project is undoubtedly very rich, very big and altogether tasty. It's also got important support from the governor of the Chubut region, Mario Das Neves. backing worth its own weight. Anyway, next month we get to see some hard 43-101 numbers.

Now the gossip, rumours and general "don't bet on this stuff" talk. Otto was talking yesterday with a long-time friend in Argentina. Word up from the bowels of BsAs tends to confirm the talk that swirled around a few weeks ago, namely that Aquiline is the target for a large silver player in the immediate future. I want to stress that this is an unconfirmed, anecdotal rumour and so take it as you will, but I'm passing this one on today (instead of leaving the rumour on my desk, as happens with the great majority) as it passes personal tests:

1) The source is one I consider very reliable.
2) It's unlikely to be duplicity from last month's scuttlebutt. Sorry and all that but can't really say why. Suffice to say that the person in question doesn't move in the same circles as the Canadian investment world.
3) It makes sense. The timing before the 43-101 resource is good, and as seen in recent days there are large players looking to buy up the beaten-down juniors in all sectors from copper to gold.
4) I do not own any Aquiline, nor does anyody I know directly. (There's one guy I mail with in Canada that owns heaps of the thing but we haven't spoke since I got back from the beach).

Here's the 12 month chart of Aquiline FYI:


Now listen very carefully: DO YOUR OWN DUE DILIGENCE, DUDE. What I'm passing here is a rumour, no more and no less. I have my opinion about the integrity of the person involved and this post wouldn't exist if I had the slightest doubt on that score. But it's still a rumour. Got it? And as for future positioning, I'm not planning to take a piece of AQI.to personally, either. I'm quite happy with my trading portfolio right now and don't want to move much further out of cash. I'd also feel cheesy after posting like this. Nuff said. Have a nice day.

Aquiline Resources (AQI.to) News

Elsztain (for it is he)

On the back of its recent and very good looking scoping study (link here) for its Navidad silver project in the Chubut region of Argentina that shows the site is good for a very chunky 15m oz of silver production per year, AQI.to has today announced a round of funding. The idea is to sell four million shares at $2.50 a pop, each with a whole warrant attached. This will bring the fully diluted number at AQI.to up to 79.1m (I think).

At least one person who reads this blog every day will be very interested to know that a single investor by the name of Ernesto Elsztain is picking up 2m of those shares, and along with the attached warrants is putting himself in line to own 5% of the company. For those who don't know the dude, Elsztain is the guy behind the perennially underperforming stocks Irsa (IRS) and Cresud (CRESY), two stocks so badly run that even George Soros noticed he was being diluted to merry hell after a while and broke off his business with them.

I wish AQI.to luck with its new minority partner; it's going to need it.