Quinsam Capital QCA.CDNX everything that is wrong with junior companies

Quisam Capital and Roy Zanatta should be the poster boy for everything wrong with the junior stocks.

First off, I am a shareholder of Quinsam Capital and I got my proxy  and AGM notice today. I always like to see what kind of salaries management feels that they are entitled to to be a "CEO" of a public company.

To my astonishment Roy Zanatta seems to have convinced the credit committee to pay him/his company $13,500/month plus $6,000 for IR work. That is a whopping $234,000 a year that Roy Zanatta seems to think his talents are worth.

Now let me fill you in on a little QCA history, QCA was started as a CPC way back yonder and managed to secure some moose pasture/Swiss cheese property to complete the Qualifying Transaction.

Once done, Roy tried hard to go fetch a copper property in the Congo but realized that a suitcase full of cash was required to get of the plane and onto the tarmac. So that was a no go.

Quinsam had a decent sized treasury of over $1 million and in a stroke of proper management decided to demote itself to the CDNX exchange to ease the burn rate.

Fast forward to today and we have a company with some sort of online subscription kindergarten to grade 5 reading and math tutoring.

A quick look at where Quinsam stood as of March 31, 2012, the treasury was now down to $325K, 3 month subscription revenue was $5,518 and Roy decided that for his efforts a handsome payment of $57,506 was deemed appropriate for his hard toiling 3 months effort of building shareholder wealth and value. Got to keep up with the Jones living in Point Grey.

Not to fear as Roy will soon be out of work as the treasury can only survive about another 5 quarters at his rate of plundering.

To throw a little salt into the gaping flesh wound, Roy feels that it is time to destroy what little wealth I have left in this company by proposing to consolidate the 23 million shares back 5 to 1.  I guess he is doing that to change the current bid of $0.01 to $0.05 so he can try to raise some money. Good luck with that.

CEO's like Roy represents everything that is wrong with public companies and the sense of entitlement management thinks it deserves. The Company's treasury is his and shareholders can go screw themselves....Suckers!

Update: June 5, 2012 I opted to sell while I could today and hit the penny bid, glad to see the tail end of this piece of shit.

Going defensive for the summer

I've decided to go defensive for the summer and sold of half the Osisko OSK.TO that I  picked up last week at $7.30/share for a small $250.00 win. I want to keep the other half to see what happens in the longer term.

Not that I am a die hard gold bug but gold really does represent a form of currency  preservation that has no counter party risk. Add to the fact that gold companies have been out of favor for some time and sold to astonishing lows, I am keeping 1000 shares of Osisko.

I have opted to hedge some down side risk to the overall market by buying 500 shares of the Horizon Inverse TSX ETF HIX.TO. The HIX is not leveraged so it can be a buy and hold short on the market.

I have a feeling that once there is a depositor run on banks in Europe things are going to get a lot worse.

 I found this interview over at Zerohedge with Niall Ferguson that was done with the CBC. Worth the 6 minutes of your day.

http://www.zerohedge.com/news/are-europeans-about-start-second-half-our-great-depression

The ECB has already thrown heaps of money at their problems only to find that it is a bottomless pit. Everyone knows the solution will be an eventual breakup of the Union, the political will is not there, as the careers of politicians are on the line.

China is another story that seems to be on the back page as Europe takes the headlines.

I also picked up 200 shares of the BMO Covered Call Utilities ETF ZWU.TO as it yields 8.5%. The covered call limits the downside volatility with the income from the call writing. If there is a big hit to the market everything will get sold off but the utilities will suffer the least damage. 

Interesting article on the potential for juniors to be taken over

I have seen this market in the past and this article in Bloomberg with Catherine McLeod-Seltzer sums the situation up.

The full article can be read here.

The coles notes are as follows:

The cost to build and operate mines is rising. Smaller companies are having difficulty accessing capital after equity markets cooled and European banks, the biggest providers of mining project finance, curbed lending amid economic turmoil at home.

  “If you have that kind of risk profile going forward, I can’t imagine sitting on a lending committee and saying we’re going to lend $1 billion to a project in some crazy part of the world,” she says of lenders caught up in Europe’s debt crisis.

 “The junior explorationist, what he needs to be doing right now is making sure he doesn’t go under, that’s his number- one focus,” McLeod-Seltzer says. Companies may need to rein in costs and delay some spending, she said.

We have seen many a promoter in Vancouver recently that have over extended themselves in the past few years and now the are selling assets to make ends meet, including their Mcmansions. But as Catherine puts it they always correct, but not till the causalities are piled up.

 “You’d have one day where my dad was building a swimming pool in the backyard and then the next thing you know he’s running around the house turning off every light,” she says. “These cycles that we see, they always correct.”

This scenario sounds a lot like Baja Mining and their eventual fate.



 

Northern Miner article on Baja Mining BAJ.TO

I was sent over a copy of Northern Miner which had a 2 page article on BAJ.TO regarding the recent cost over runs of $246 million and management fight.

The broad strokes of the story focuses on Greenslade going out and Mount Kellet Capital (which owns 19.8% of Baja) finding a solution for the funding shortfall.

The options include finding money in these markets, joint venture participation, a good fit with companies like First Quantam FM.TO or Inmet Mining IMN.TO taking over Baja with paper or the Korean consortium that owns 30% of the Boleo project ups their interest to 51% and gets the project completed.

There is going to be some volatility down here at these prices until a solution is found. I have traded out 10000 shares at $0.275/share for a quick profit and will join back on the bid at $0.25.

Watch for any unusual spikes in volume as that will foretell a solution may be at hand.

My thoughts are that Mount Kellet Capital will probably try to find a suitor for this deal and be done with it, after all is the management of Mount Kellet Capital mine builders or a hedge fund?

Buying Baja Mining BAJ.TO troubled story

I picked up 25,000 shares of Baja Mining today now that John Greenslade and his posse have been booted off the board. Stepping up to the plate is Ken Murphy (from Mount Kellett Capital Management) and he has managed to bring back dissident board members Tom Ogryzlo and Wolf Seidler. There was some issues over corporate governance that has driven the price of Baja from $1.10 to $0.25.

Baja Mining is pretty far down the pipeline with their Boleo project a copper-cobalt-zinc property and things have fallen off the rails.

The credentials of Ken Murphy has given me confidence that this ship can be righted and my purchase here at a quarter will be a good entry point.

Mr. Murphy is head of asset management at Mount Kellett Capital Management LP and has over 23 years of experience in principal investing across various forms of opportunistic investments. Prior to joining Mount Kellett, Mr. Murphy served in a variety of positions at Goldman Sachs covering 21 years in New York, Tokyo and Dallas, where he rose to the position of partner. Key positions held by Mr. Murphy during his tenure at Goldman Sachs include co-head of Americas Special Situation Group, head of services division (Archon Group: 1,700 staff and Litton Loan Servicing: 1,600 staff) and head of Asia Asset Management. Mr. Murphy is a graduate of Baylor University.

Baja's AGM is on June 21st. I think I will go to this one to see what kind of fireworks go off.

Good Morning Tolima Gold TOM.V

And good bye to the other 5000 shares I bought at $0.19/share this morning. I  managed to sell it out on the flurry of morning activity at $0.32/share. A nice easy $460 win after brokerage. I am still long 30000 shares at a higher price but nice to take some cash off the table. I rejoined the bid at $0.26 for 10000 shares as it seems we are headed back into the $0.40's.

Buying the dips update

I have managed to grind out a few bucks the last 2 days with wins on Golden Minerals that I bought at $3.40 and sold at $3.80. The recent purchase of Americas Petrogas was a bit hasty, after I got long at $1.99 and $2.00 it traded down to $1.55. Miraculously it traded back up to $2.25 where I thought it would be best to sell and wait to play another day.

BOE did crank out this news release today so maybe life isn't so bad in Argentina after all.

Americas Petrogas Inc.'s preparations for the La Hoya x-1 well in the Totoral block are complete and the drilling rig is expected on location in early June. The primary drilling target of the La Hoya x-1 well is the Vaca Muerta shale. The Totoral block, of which Americas Petrogas is the operator and holds a 90-per-cent working interest, is approximately 293,600 acres or 1,188 square kilometres and is located in the southern region of the Neuquen basin of Argentina. Gas y Petroleo del Neuquen holds the remaining 10-per-cent interest.
The La Hoya x-1 well is planned for drilling to a total depth of approximately 2,000 metres with the principal target being the Vaca Muerta shale formation. This is a significant well for the company since it will be the first Vaca Muerta test in this block, which lies in the Picun Leufu subbasin. The well is located 16.6 kilometres northwest of the Canadon CN x-2 well drilled by YPF in 1962 which tested oil in the Quebrada del Sapo sandstone. The La Hoya x-1 is located on a present-day syncline where the Vaca Muerta reaches its deepest position in the block and where higher formation pressure is expected. Geochemical analysis indicates that the Vaca Muerta is in the early oil window. In addition to the Vaca Muerta, the Picun Leufu subbasin offers other opportunities in formations such as the Los Molles shale as well as conventional Pre-Cuyo, Mulichinco, Quintuco and Quebrada del Sapo. The Picun Leufu subbasin is a relatively unexplored depocentre.

CGA Mining has been kind to me also after picking up shares near the 52 week low, $1.56. I opted out today at $1.80.

Tolima Gold seemed to have it's capitulation moment last week at $0.19/share and it seems to have taken the motivated seller out of the market. I opted to sell at some $0.23 and get back on the bid but it looks like we might be heading higher.

I went long 1000 shares at $7.00 of Osisko Mining OSK.TO today as this deal looks severely oversold and the mining sector seems to be bottoming.

On a last note, I also picked up 1000 shares of Element Financial EFN.TO at $5.23. This is a Steve Hudson deal that does lease back equipment financing. His name to fame was the old Newcourt Financial that became the biggest non bank lease financier. It was later sold to Tyco Corp then CIT Group which then imploded with the mortgage back securities fiasco in the USA. I guess Steve's non competitive clause has expired and he is back to doing what he knows best. Element Financial will be a steady as she goes stock.

Credent Capital CDT-P.V finds Qualifying Transaction

I have had Credent Capital for awhile now and it seems that they have found a deal with Elephant Copper. Elephant Copper as you may guess by the name has a bunch of properties in Africa. The news release is rather lengthy so I will pull the parts that matter. Two thing of note is that there is no consolidation of shares going into the QT and it would be good to see how much the new group is going to raise.

Sounds like these properties are mostly wildebeest pasture properties and with all things African the Directors better be well connected and have plenty of cash to get things done over there.

Elephant must complete a financing for minimum gross proceeds of not less than $1-million at an issue price of not less than 15 cents. It is expected that the offering will be completed prior to the closing of the transaction and the securities of Elephant issued pursuant to the offering will be exchanged into corresponding securities of Credent in accordance with the exchange ratio. The net proceeds of the offering will be released to the resulting issuer upon completion of the transaction. Further details regarding the offering will be included in a subsequent press release once additional details become available.

Nyimba project
The Nyimba project is located 300 kilometres east-northeast of Lusaka, Zambia, and can be reached by tarred road.
A number of base metal, gold and graphite deposits are known throughout the Nyimba area, most of which have been discovered by fairly regional exploration activities over the last 30 years.

Lunga project
The Lunga project is located in west-central Zambia approximately 250 kilometres by road to the southwest of the town of Kitwe in western Zambia.
The Lunga project lies at the boundary between the Upper Roan and Lower Kundelunga. There is limestone outcrop in the northern part of the Lunga project and argillite outcrop in the southern part of the Lunga project. Chartered Exploration and successor Zamanglo Ltd. identified a zinc anomaly through geochemical soil sampling and reported values of up to 3,100 ppm zinc, 245 ppm lead and 780 ppm copper. Twenty-five pits were excavated over the anomaly and material sampled gave results of up to 5.6 per cent zinc.

Botswana properties
Elephant's three properties in Botswana are located on either side of the Kalahari copper belt where Hana Mining Ltd. and Discovery Metals Ltd. are currently active and have reported copper mineralization and published mineral resources.
The western properties are approximately 250 kilometres (western lower) and 200 kilometres (western upper), respectively, from the town of Maun, and the eastern property is 100 kilometres to the east of Maun. The town of Maun is accessible through tarred roads. The properties are accessible on secondary roads from Maun.

I  got 10000 share of this one and unless they had an oil property next to African Oil my exit will be soon after the completion of the QT.

Apologies for the lack of postings as of late

I must apologies for the lack of postings as of late. I have changed mortgage brokerages recently and my partners have spearheaded a division at Mortgage Alliance called " the alternate lending team".

The purpose of our team is to help home owners out who have become credit "distressed", it is our niche.

The team will work with over 200 Mortgage Brokers in BC in finding ALT-A, B and Private Lenders for their clients to rehabilitate their credit worthiness.

The hard launch of this division will be around June 6th. So I have been busy.

The broad strokes are

If you find yourself with any of the following situations

·  Divorce/family illness/injury/death
· Former and current bankrupts
· Poor credit history resulting in bruised credit score
· Excessive use of consumer credit
· Property marketability/location
· No provable income
· Debt servicing not in line with A standards
· Down payment verification
· Mortgage funding time frame constraints
· Temporary life events that disrupt normal income flow

If you know anyone or need my help in any of these situations get a hold of me through my site at www.davebowes.com.

Debt can be a real wet blanket in life and my philosophy is about getting people out of debt and making some money. My website is for easing debt and the blog is for fattening the wallet.

Enough of the public service announcement.

Jim Comiskey comment on gold and the blood in the water

I found this link over at TF Metals, Jim Cominskey comments on the blood in the markets that we are all feeling.

Enjoy!

Capitulation on Tolima Gold TOM.V

Tolima Gold TOM.V has had a skeleton in the closet since the reverse takeover of FMX Ventures and has had constant selling pressure.

Today Cannacord crossed 1.3 million shares of Tolima Gold at the low low price of $0.19/share. Now I do not know if this was the final throw in of the towel but someone took a loss and someone got a large position for cheap.

I managed to buy another 10000 shares toady at $0.19/share bringing my position in Tolima to 30,000 shares, albeit at higher than today's prices.

Is this the low for Tolima? In this market anything can happen and the mining deals are being way oversold.

Tolima did pump out this release today and if I am not mistaken Tolima commenced a 10,000 metre drill program on the Remedios Project back in February.

Tolima Gold Inc. will commence an initial 5,000-metre drill program at its Ancal project in the Antioquia department of Colombia.
From a previous sampling of stream sediments, rocks and soils, and from geological-hydrothermal alteration mapping carried out in some areas of the Ancal project, a geological potential for disseminated mineralization porphyry copper-gold deposit type was defined, with four prospects identified in the area: Orofino, Pacora, El Salto and San Bartolome.
With that information, Tolima conducted a ground induced polarization and magnetic survey program of 57 lineal kilometres by Arce Geofisicos in the Orofino/Pacora sectors, in order to verify and identify additional targets in the immediate area. Furthermore, a series of superficial soil sampling has been conducted in the area, reporting some high values as shown in the attached table.

Sample                        Au           Cu          Mo
                            (g/t)        (ppm)       (ppm)

R4-000202-203                0.9        621.1     4,998.7
R4-000205                    0.1      2,425.0       206.3
R4-000206                    5.9        103.8       886.5
R4-000207                    0.7        480.5       190.3
R4-000208                    0.4        359.2       446.4
R4-000209                    5.6      8,106.0       182.7
R4-000210                    0.5         60.5     2,334.3
R4-000212                    0.2        661.1       538.1
R4-000217                    1.2        204.2        18.3
R4-000224                    0.3        550.8         2.5
R4-000225                    1.3      1,693.0        38.7
R4-000226                    0.3        366.7        93.5
R4-000230                    1.1      1,398.0        35.9
R4-000232                    1.4      1,447.0        12.5
R4-000233                    0.5        750.6        19.6
R4-000234                    2.2        127.1         3.3
R4-000242                    0.2         60.8         4.4
R4-000244                    0.3        266.8         2.3
R4-000247                    0.6        333.2         2.9

With the results of the mapping, surveying and sampling programs, Tolima has delineated a preliminary program of exploratory diamond drilling of 5,000 metres using HQ/NQ standard diameters at an average depth of 450 metres, expecting to confirm the presence of disseminated mineralization and porphyry copper-gold-type deposits. A total of two rigs will be in operation and four preliminary drill holes will be conducted in the area.
Commenting on the drilling program at the Ancal project, Tolima's president and chief executive officer, Jaime Lopez, stated, "We are looking forward to the commencement of the drill program in Ancal and hope to confirm its potential to host significant disseminated deposits."
Geological environment
The Ancal project is located within the Middle Cauca gold belt, a highly prospective area with potential for porphyry-related gold-copper and epithermal precious metal deposits. The area is being explored by numerous companies including Anglo Gold Ashanti (La Colosa), Gran Colombia Gold (Marmato), Continental Gold (Buritica), Sunward Resources (Titiribi), Colombia Crest (Arabia) as well as Bellhaven Copper and Gold (La Mina). The geology of the properties includes Paleozoic metamorphic rocks as well as Tertiary sedimentary and volcaniclastic rocks which have been intruded by igneous rocks of recent ages with the potential for two types of mineralization: porphyry-related gold/copper with minor silver content and epithermal gold-silver vein mineralization within the metamorphic, volcanic and intrusive rocks.

It takes courage to buy when nobody else is buying, yeah things are falling apart in Europe but we knew that already. What are they going to do? Default of print their way out? My bet is on printing and the continual debasement of currencies. This can only be good for the precious metals as there is no counter party risk involved. Unfortunately this also means that there are garage sales across all asset classes to raise money for sovereign nations and hedge funds.

I have seen this market before in the juniors but for different reasons and many deals are extremely cheap.

I am long many mining deals and I have been able to create a healthy portfolio of more senior deals that are trading 40% off their highs and better yet trading at new 52 week lows. Other purchases this week include CGA mining at $1.58/share and Golden Minerals at $4.60/share.

Miracle on the Hudson HUD.V

A win is a win is a win! For some miraculous reason today Hudson Resources HUD.V made a new 52 week low of $0.21/share only to roar back and close the day at $0.385/share. I had left an open order in the market at $0.39/share and managed to sell 5500 shares.

Hudson Resources managed a 71% return today over yesterdays close giving me, the speculator hope in this dismal junior market. Since I was long at $0.33/share and selling at $0.39/share my return so far is 18%.

There is no news out on Hudson so I wonder if it was a Fat Finger Friday?

TSX Venture stats

These stats were released this week by the TMX Group and they look pretty dreadful for the juniors.

Market cap for the Venture exchange has dropped 38.2% year over year and financing raised has dropped 51.7%. It looks like it is going to be a tough summer ahead for the juniors and if you are brave there should be some exceptional bargains with any junior that has cash and a decent project.

Year-to-date Statistics
                                                         2012                    2011               %Change
IPO Financings Raised               $43,877,717            $111,532,660        -60.7
Secondary Financings Raised      $727,772,624         $1,328,724,264     -45.2
Supplemental Financings Raised  $1,471,769,448      $3,206,214,384     -54.1
Total Financings Raised               $2,243,419,789      $4,646,471,308     -51.7
Market Cap Listed Issues           $47,847,171,848    $77,466,285,317   -38.2

This is why good corporate governance is important, those public companies who's management used the treasury like it was their personal ATM will find it very difficult in this environment to raise any money.

I have quite a few juniors on my watch list but there seems no urgency to buy any of them, especially as more established stocks are trading near their 52 week lows and have more liquidity.

BTFD, I have gone contrarian

First off I am totally ripping this off from a posting on Zerohedge but I like it.

I have gone contrarian this week and have been buying on yesterdays dip and last weeks new lows on a few miners.

I managed to pick up 4000 shares of Americas Petrogas BOE.V at $1.98 and $2.00/share. Pan America  Silver PAA.TO at $15.25/share, First Majestic Silver FR.TO at $14.70/share, CGA Mining CGA.TO at $1.90/share, Golden Minerals at $6.05/share.

My only regret is that my timing was a bit off on CGA Mining and Golden Minerals as both touched a bit lower after my purchase, especially Golden Minerals that managed a $5.08 print yesterday. After that print I had a bid in to buy at $5.15 but the stock never traded back there again.

Dead cat bounce today? As of 9:33 am PST all my purchases seem to be looking a bit stronger today with First Majestic, CGA Mining and Americas Petrogas being in the money. The balance of the stock I purchased are just shy of my entry points.

On another note, every time I catch Kim Parlee on BNN I always wonder if she is really a vampire?