First useg is in the process of getting the mine permitted. Must first file a plan of operations which will be in the early part of 2013. Cost should be 1-2 million until plan is filed. This is a starting point in the mine moving forward, not opening for production which would take 3-5 after. Thompson creek spent over 15 million and that data is now in useg hands. Mt emmons has a very high grade of moly which is a big positive. The most important factor is the area. Upper middle class who have bought 2nd homes to be in a ski resort area with a strong non growth mentality. Crested butte, gunnison county rely on tourism and skiing. This year do to the sunny days at the ski resort tourism has declined over 40 percent. Property values have declined even further. Its like buying a lake front property and the lake dries up. The economy of the area is in shambles. The big conservation group is almost out of business do to a large drop in donations and grants. The mine like it or not maybe the only way out for the area. Now Keith is holding on to the mine because he believes once the plan of operations is flied the value increase 10 fold. At any point he believes he can find a partner or sell the mine. Just depends how much he wants to give up and Keith does not want to give up much. For a small company like useg the mine is worth several hundred million if permitted. Your call sell now for small pudding or go for the GOLDEN PUDDING.
Barry, I could be wrong but that's not my impression. I do thing the world of Wall Street baffles the executives at USEG. For example, the analyst at C.K. Cooper asked Keith what current production was. He said 1,600-1,800 BOE pd. But he then cautioned that they had two really good new wells with Brigham that would decline in production from current levels.
The folks at Brigham and Kodiak never mention that wells have a decline curve. They simply pump, pump, pump. Brigham pumped itself into a multi-billion dollar buyout. Keith is an honest straight shooter. That is not rewarded by the market. He has has a company with ridiculously undervalued assets, but will never be a Wall Street pump and dump artist.
My target price on USEG is somewhere between the mid-teens and mid-twenties over the next 12 months assuming market conditions remain the same.
In my opinion the only reason TC got involved was to get an option arrangement for their own benefit and/or to preclude others from entering the moly market. Presumably moly has topped out(as well as the Market) now and their mines will take care of their market participation for the immediate future.
The potential rewards from the mine are so large that USEG has to keep poring dollars that way because not doing so would be more costly (so they are stuck as long as they believe!)
So if they got an offer for the whole company what would they sell for and what might an offer be? Probably too far apart, so here we sit until the next boom! (Unless they strike oil, and I mean OIL!)
You certainly bought the Keith Larson story hook line and sinker. Keith is definitely not a straight shooter or he is one stupid ceo. Let Keith put the money of the company were his mouth is. Let him divest the company of non-performing assets. Company does not need all the property they have, let them sell it. Let them sell the building and they can lease it. Much, much cheaper........And on the conference call investors would like to know what stage of planning are they on mt emmons, are they talking with other companies. Keith could add a few more comments and its legal. No Keith Larson is about Keith Larson and the nice 10 million bonus management got on the uranium one deal........
People by on spec and what they see in the person giving the presentation. You can have a company doing poorly and the stock doing well. Keith larson has been at the helm of useg for a long time and has done poorly as a ceo. His presentation is poor and his future of what useg should be is poor. His track record with money is not good. Investors don`t buy his story and he really does not give a crap what investors think or say. Perception turned into reality and that is why you have a 2 dollar stock with assets above 5. ......... If Keith really cared everyone in the company would take a 10% pay cut to bring down costs. Never will happen not with a family run business. I have spoken to Keith in the past and you can see what his real motives are, have an interest in the company looking for an eventual buyout. Unfortunately if this ever happens the price will be a lot less then I was hoping for.........Keith does not look at investors as long term. His attitude, investors here today gone tomorrow. Always looking for a new crop of idiots.
I too am disappointed with performance and perception. It is hurting the SP. Management and BOD must know that other shareholders cannot be happy. Even the threat of a special shareholders meeting to demand action by the BOD make rock their boat. I am a long time long and own and have influence over 150k shares. We would need institutional support. We need someone to help spearhead a movement.
If Keith is arrogant enough to think you are the only shareholder with discontent he needs to be put out to pasture. Bought out, resign, whatever. There is something I am looking into but want to be correct on info. Will post about a month from now if info is worth posting. Good luck.... they still have decent assets and one day someone may scoop them up unfortunately for shareholders at a deep discount.
companies,items for proxy vote have to be submitted way in advance of the meeting. The idea is that by the time you get upset, the submission time is to close. Been doing this seriously for 30 + years.
In a recent conversation with Keith, he stated that I was really the only person who complained to him about how he ran USEG. I post under this name & only this name on this board.
Our only hope is to show the 'independent Directors' (right !!) that the Board's policies of not requiring management to own stock also engendered an uncaring attitude by Keith.
The Board of Directors pays lip service to their concern about fiduciary responsibility but they really like the quarterly check & cheap options. They do not care about the stock price either.
If we vote against everything, it may at least show that I am not the only one that thinks management needs to provide a return for the remaining 85 % non managers. Maybe even show that there is enough discontent for a lawyer out there to bring a class action suit regarding fiduciary responibility. Note to lawyer : apply within.
I talked to Reggie a while ago. He told me they had offers for the mine from Canadien junior miners. Since most of their profit will come in the form of a royalty they decided to start the NEPA process. They believe bigger and stronger miners will be more interested once the permitting process is underway and they will get a better price.
They have a court order that requires them to file their Plan of Operations by April 2013. Some companies will not want to take a chance on paying upfront money and then missing the deadline. The mine is worth a lot more money if USEG can file by next April and preserve their water rights.
From the 10-K:
On July 25, 2008, we filed an Application for Finding of Reasonable Diligence with the Colorado Water Court (“Water Diligence Application”) concerning the conditional water rights associated with the Mt. Emmons Project (Case No. 2008CW81). The conditional water decree (“Decree”) requires the Company to file its proposed plan of operations and associated permits with the Forest Service and BLM within six years of entry of the Decree, or within six years of the final determination of the pending patent application, whichever occurs later. The BLM issued the mineral patents on April 2, 2004. Although the issuance of the patents was appealed, on April 30, 2007, the United States Supreme Court made a final determination (by denial of certiorari) upholding BLM’s issuance of the mineral patents. The Company filed the plan of operations on March 31, 2010.
On August 11, 2010, High Country Citizen’s Alliance, Crested Butte Land Trust and Star Mountain Ranch Association, Inc (“Opposers”) filed a motion for summary judgment alleging that the plan of operations did not comply with the United States Forest Service (“USFS”) regulations and did not satisfy certain “reality check” limitations contained in the Decree. On September 24, 2010, we filed a response to the motion for summary judgment responding that the plan of operations complied with USFS and BLM regulations and satisfied the reality check limitations. The U.S. Department of Justice also filed a response on behalf of the USFS and BLM asserting that the Court cannot second guess the USFS’s determination that the plan of operations satisfied USFS and BLM regulations.
On November 24, 2010 the District Court Judge denied the Opposers’s motion for summary judgment and held that Company had until April 30, 2013 to comply with the reality check provision of the Decree, which is six years after the Supreme Court denied certiorari in the judicial proceeding. The question of the adequacy of the Water Diligence Application is pending.
At one time I would travel to the crested butte, gunnison area twice a year. I have friends that purchased 2nd homes there. They are so underwater with their condos they would just like to walk away. At one time this was a upper white middle class area with a strong no growth mentality. Not anymore tourism and business is drying up in the area. The ski resort will cutback or close if they have another winter like this one. The middle class is dead in the area. Years the ago the opposition from locals and activist groups was the reason behind the mine not being permitted. It just was to big of a fight. That has changed completely. Even the liberals who hate the thought of mine before, would consider it now hoping it will bring some middle class jobs to the dying area...........Moly in the last couple of years went from $26 pound to around 7-price now is about $14 pound. It was estimated it would cost about $5-6 to get it out of the ground. Emmons has the high grade moly which is most in demand. Useg must be one of the luckiest companies around. They have over 15 million dollars worth of data that was provided free compliments of Thompson creek. Your talking about a billion dollars of moly at $14 and even other metals. If useg files by April 2013 and Keith is not blowing smoke and whoever they partner with gives minimum 15 percent your talking the least 150 million over the life of mt emmons. Remember useg alone cannot get the mine going they must bring in another partner.