Friday, 22 November 2019

The Mining Alliance Of Trust: Eric Sprott - Save Canadian Mining, Stop Predatory Short Sellers.

As you already know, the best game requires the fare rules and strict enforcement of them for the benefit of all parties participating in the market place. Thank you, everybody, who started this extremely important action. Thank you, Eric Sprott, for your support of junior mining investors and companies. We need strong powerful leaders to build Canada in the modern investment hub for the real economic growth in the 21st century. 

Return to solid values during the uncertain times makes Gold shining bright and Energy rEVolution will power the rebuilding of the sustainable mining industry. We just cannot allow to miss this chance for all the hardworking people involved in our industry. Mining builds. Naked short selling is cancer killing our junior mining space and I am happy to join all these voices to stop it and build a healthy market in order not only to regain the trust of the investors but nurture the new generations of them.

The Mining Alliance Of Trust: Do Your Own Research - Avoid At All Costs Flying With Kamikaze Pilots.

It is time to return to our conversation about The Mining Alliance Of Trust. We have a lot of regulators in place who are helping to police and organise the market place in Canada. You can find them on my twitter feed. Among others are the British Columbia Securities CommissionInvestment Industry Regulatory Organisation of Canada and Ontario Securities CommissionEvery investor in junior mining must follow them and subscribe to their e-news. Every junior mining company must follow them and invest in a professional Corporate Secretary in order to avoid costly mistakes and not to build fortunes for lawyers instead of their company.

All regulators in Canada are doing a great job and sometimes they are catching bad actors who are too sloppy, but how many still manage to muddy the waters of junior mining for years? We cannot restore the trust and build up the new generation of investors with the existing system. The hard-working geologists who became Executives of Junior Mining Companies in order to pursue their dream do not have a relevant legal and business education and just words IIROC and BCSC on the letterhead can bring them a heart attack. 

On another hand "smooth criminals" wearing expensive ties continue to find their ways to separate investors and their money with "1000 and one" "relatively innocent scams" - buyer beware. This system is not perfect: the good hardworking guys are spending literally millions of dollars on compliance, lawyers and other red tape requirements while "smooth criminals" are gaming the system and still walking from one company to another in the Bay Street jungle. Retail investors are running in herds from one hot tip to another and losing all their money in the process. 

We can and must improve our market place altogether by amplifying this discussion which we started as our initiative as The Mining Alliance Of Trust. On one side, all regulators must be open to the market participants and help them first and advise how to organise efficiently the trustworthy business in junior mining. They should not just seek to punish those who get caught the first time in the crossroads of some innocent mistakes. On another side, companies must really embrace regulations. Here I must say, that from my personal experience, I have only very positive encounters with all regulators, they are all very open and ready to help. We have to make a few improvements just to make it more user-friendly.

The very simple and helpful idea can be the systematic friendly review of the Companies by the regulators in order not just to find what to punish for, but to help these companies properly present their projects and avoid any innocent mistakes. This system is already in place for news releases with IIROC and I do recommend all companies to use it by sending news releases always to IIROC first.

Another very important step can be done with the new industry standard for Corporate Secretaries in Canada. BRE-X scandal has brought us Qualified Person certifications and NI 43-101. But we will not be able to rebuild the trust of the junior mining industry in Canada and bring the new generation of investors if Vancouver will remain The Wild West of mining. I believe that in order to solve this situation Corporate Secretary must be licenced as Auditors and Lawyers. They must be signing every news release on Corporate Material Information Disclosure as QPs do when it is necessary on technical disclosure.

For example, TNR Gold has our Continuous Disclosure, Confidentiality and Insider Trading Policy approved by the Board and Communication Protocols in place when all our news releases are prepared and approved by Corporate Secretary, signed by QP when required and can be released only by Corporate Secretary after being approved by Executive Chairman. But companies and regulators can do only so much protecting investors. Investing is a job and must be taken seriously, it requires very specific skills, discipline and making your homework every day. Respect your money.

Everybody is talking super-smart during the cocktail parties about investing in mining but many are salivating about speculation and investing in the drill holes not in the companies in junior mining. Respect your money. #DYOR. Do Your Own Research and start with people and their history - avoid at all cost flying with kamikaze pilots. You have very different goals. The Same Boat must be the concept which is checked out first - should you even spend more time on your Due Diligence? 

You can find a lot of very important questions for your DD of the mining companies on the charts on this blog. The first and most important: Who are the principals and major shareholders? Are they miners, entrepreneurs or banksters? How long have they been in the mining business? Are they building the junior mining company or financial pyramid where the average investor is lost in the amount of the different debt instruments and "ticking time bomb of delayed dilution"? How management is treating shareholders? Has the company become the candy store for the "super smart" executives syphoning all money back to them as interest payments, fees and commissions? Is the company diluting existing shareholders like there is no tomorrow just to keep it "as going concern"? What is a business plan? What is the burn rate in order to reach the milestones of this business plan? Have the company become a "drilling paradise" when naive investors are waiting for a golden dream intersection while management is drilling through shareholders pockets - spending all the raised money on the drilling by owned by them geological services or drilling company? 

It looks like a lot of questions? But we are talking here about your money - does it deserve your respect? The entry point in any new investment will define the success of your investment. Start with people in order to weed out all the ones where you should not waste your time anymore. As Warren Buffett has brilliantly put it: "You can't make a good deal with a bad person", I think that we can Trust him on this one. 

No comments:

Post a comment