Die Finanzierung wird aslo so oder anders auf jeden Fall vorgenommen.
Grandich Client Formation Metals
To those who have inquired about Formation Metals, below is an email Rick Honsinger of FCO sent a reader who had first emailed me:
Hello Mike,
Peter passed on your email to me and I have taken the liberty of responding back to you directly. See my response below that I sent to another shareholder with obvious similar concerns. Feel free to call me directly to discuss if you like, or drop me an email with your number and I will call you back. We hope to get an update out to Peter next week.
Best Regards,
Rick
E.R. (Rick) Honsinger, P.Geo.
VP Corporate Communications
604-682-6229, Ext 2
Formation Metals Inc.
rhonsinger@FormationMetals.com
www.formationmetals.com
Thanks for the email. We can certainly appreciate your frustration with the share price – we are all shareholders here. There is a complete disconnect between what the markets are valuing companies at and reality right now – and we are not alone. There is no material reason for the decline in share price – construction is continuing on track and we are moving forward with the financing and, as of today at any rate, we are still on track for start-up of production later in Q2-2012. I believe the rally in the markets today in response to the EU summit meeting held to resolve the EU sovereign debt Wednesday was short lived – see the headlines attached.
Regarding the “Deadline to arrange additional support” please understand that this is not a make or break deadline. One, we may be able to extend it if necessary (and of this I am not sure…), but if it cannot be extended, then the bonds are simply removed from the equation and we continue discussions with the banks for a straight debt financing. The banks don’t distinguish between a Letter of Credit to support bonds, or writing us a cheque in a debt financing – the due diligence process is identical. If we cannot take advantage of the bonds (which is preferable, as it would mean we could get rid of the banks quicker), the we will do what 90% of all mining company’s do – raise money through equity (done) and debt, typically with a bank.
The current decline is the share price has everything to do with the current world financial crisis and redemption calls on funds. In my opinion, the selling it is the result of a fund that that is in trouble that has numerous redemption calls and must come up with cash to put money in their clients’ accounts who have sold their mutual fund – most likely those that are heavily weighted in resource stocks that have taken more than a 50% decline over the last couple of months. The selling is typically done through House 1 (Anonymous) as the sellers do not want to be identified. If numerous clients all sell (redeem) at the same time, the funds have no choice but to liquidate to come up with cash to put in their accounts and in doing so, drive the value of the stocks down further. It is also month end and we are entering tax loss selling season.
House 1 has been relentlessly selling over the last couple of months. In September, one house alone was responsible for over 90% of the selling from Anonymous, and anonymous was the largest seller that month. We have $55 Million in the bank (as at Aug31, 2011) and the market valuation of our stock is currently $38 Million ! They are discounting our cash by 30% – and giving zero value for the cobalt project. That is NOT a reaction to “uncertainty in financing” – for a cashed up company with no debt.
There is little “promotion” that will stem this sort of selling – and without a solid foundation and a logical approach, it would be short lived. Many would look at this market as an opportunity, while other panic and bail out. I know exactly where at least three hundred thousand shares of buying over the last three days came from, and as you can see, this didn’t move the stock at all.
We have $55 million in cash in the bank and a project with an NPV (discounted 8%) worth some $88 million in the bare bones base case scenario. That’s $143 million and the market is valuing us at $38 million – 30% less than cash in the bank. The recent news release was to demonstrate how we are moving forward despite the markets around us – and that we have enough money in the bank to weather any financial storm.
I did an radio interview with Al Korelin of the Korelin Economics that elaborated on this which should be out tomorrow sometime. (www.kereport.com)
Best Regards,
Rick
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