Gordon mentioned earlier in the year that they were looking to monetize the increasing value of their assets, in particular, Oceanica, through investment banking. OMEX can undertake far more projects if it has more funding capabilities. This is why It was stated OMEX was having a meeting today to talk about any re-balancing for operational initiatives. OMEX may very well have the capabilities now to raise debt to fund additional projects using Oceanica, for example, as collateral. There will not be dilution as it is unnecessary except to the extent the wet the palms of the investment banks.
Look for additional research coverage as well.
As for the G and M, the ROI skyrockets on these projects if simply the insured silver is recovered.
I love reading the misguided posts of certain naysayers here. They try so hard!!
See you above $4 this month.
This is a nice thought however even having been long here for years, due to all of the short interest it hasn't been over $5 since just after the discovery of the Black Swan. Do you think it will? Hopefull!
I can understand your thoughts as a long term shareholder. HOWEVER, as a long term shareholder, can you point to a time when the company had the prospects of a several hundred million dollar mineral find? Can you point to a time where the company could recover approx. $60MM of gold/silver from the G & M and only have to pay the UK 20% after recovering expenses? There is no Galt to pay.
In addition to Oceanica, the Chatham and neptune investments appear to be valuable and growing over the next handful of years. The company has virtually no debt now.
When has the company ever engaged 5 investment banks for anything? When has the company engaged legitimate investor relations counsel to work directly with funds and banks?
What I am saying is I believe the OMEX of the future is not going to replicate the OMEX of the past. I understand the wariness of long term shareholders. I understand the negativity from those longing to see OMEX fail miserably. But from my perspective of being here less than 9 months is of a company with immense potential both operationally, and more importantly for shareholders, in share appreciation.
We will know soon if a new day has dawned. A $50-60MM recovery from the G and M provides cash flow for multiple projects. A report on the mineral deposits with Oceanica in less than a few months that is anywhere near the definition of "world class" sends these shares to $10.
I am no pumper. I admittedly acknowledge these events still must occur. But the odds favor OMEX here. Oceanica appears to be very solid from the reports and the G & M appear to be on the cusp.
Have a great weekend. You never know when news will hit.
One thing Gordon did not mention was the 7 major mutual funds who have verbally agreed to buy, once we get over $5. This will be huge if we can get there, as it also allows marginable trades for them.
A company can never go wrong if they can take 3% borrowed money and use it to make a 5 to 10% return. (numbers for example only) It's great to be able to use other people's money to make money! You can even do that with your own money.
For example, I didn't pay off my mortgage early because it was only costing me 8%, and the money I would have had to use was making 10%. On top of that, the mortgage interest was tax deductible and thus offset the taxes on the investment return. People make the mistake of taking money from an investment that is earning a high percentage and paying off a lower rate debt just because they don't like being in debt.
Now, if only the government could figure out how to do this with our national debt!
A lot depends on the interest rate. For example if your mortgage is at 8% and you are making 10% on the money invested, you might be able to refinance at below 4% and triple the amount you are making on your arbitrage.
On the other hand debt can be very disadvantageous if you don't have the funds to pay it off. It can be more expensive and it can force you to abandon activities that might be risky but rewarding. I know someone who went to a seminar through their union on investing in movie production with a supposedly guaranteed return of over 10% who mortgaged their free and clear home to invest and lost their home when the investment stopped generating income and failed.
OMEX will probably not incur additional debt until they are sure they have at least the additional insured silver located. It might be an early indicator that they have silver coming in to port.
If the government borrows funds to buy mortgages on homes that are overpriced due to under market mortgage interest rates, they will end up losing money on the transaction when the interest rates rise to market levels and the homes decrease in price when the buyers have to pay market interest rates. The government can't keep the national debt at a reasonable level because they aren't looking for a return on their capital and don't know how to spend money without wasting it.