Not cool that they are seeking additional money, reinforcing the notion that they are pretty much just a holding company waiting to "get by." And if market conditions don't improve, what's Plan B ?? Investors should be pretty nervous that to continue they are counting on other companies to provide a payment, and looking to raise cash by liquidating 5 year old equipment. The market punished VGZ stock yet again on this news.
"This transaction provides Vista additional working capital during a significantly difficult equity market. We remain optimistic that the Invecture Group will later this year complete the earn-in on the Los Cardones gold project in Baja California Sur, Mexico. The earn-in would include a US$20 million payment to Vista. Furthermore, we have been informed that Invecture's development strategy contemplates mill equipment other than the mill equipment that we own. As a result, we have retained A.M. King Industries to manage the sale of the Colomac mill equipment that we purchased in 2008 for the project. The added liquidity will afford us time for these events to transpire."
Mr. Earnest continued, "We evaluated several non-dilutive financing options and have come to the conclusion that this opportunity provides us with the best option to preserve future shareholder value while we continue to advance the Mt. Todd gold project, which we believe the market is significantly undervaluing. We also believe there is significant upside in Midas' Golden Meadows project and continue to be very supportive of Midas' efforts to advance this project. We believe it is not in the best interest of our shareholders to pursue the sale of Vista equity or the sale of any portion of our Midas holdings at this time."
Mr. Earnest concluded, "We have taken pride in being debt-free, but given the difficult equity markets and the timing uncertainties related to the sale of the Colomac mill equipment and the Invecture Earn-in, we are pleased to have the support of a lender who understands the undervalued nature of our assets. We expect to complete the preliminary feasibility study and submit the permit applications for the Mt. Todd gold project shortly, neither of which are particularly capital intensive. However, other significant development commitments will be deferred until market conditions improve for junior gold equities."
So actual development, actual showing revenues could be indefinite is how this sounds. Raising cash from Sprott in the meantime waiting for ;possible buy-ins from other companies and the sale of equipment..... then what, if the whole thing is shelved indefintely? Doesn't sound good.
Sadly, Just like Mexico, Fred does not have local experience in Australia. $VGZ is a lamb ready for the slaughter. Australia NT Government and Australia operating expenses will make that 10M disappear in short order. USA investors do not realize that diesel fuel is over $6.00 USD in Australia.