Post by granny2shoes on Mar 16, 2007 16:40:31 GMT -5
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since their filing earlier this week i had several ask me these questions and thought i would share the answers with the board, granny
uscanadianminerals.biz/cms/index.php?option=com_content&task=view&id=12&Itemid=2
Hello Carlain,
Good to hear from you, I hope you are well. Let me try to answer your questions.
1. You put on your website how to get our shares USCA unrestricted, are you suggesting we do that and then sell them, i didn't know this was the process to get them unrestricted as we have some others that are restricted, but understand this is the process for each company,
We placed the info on restricted shares and how restricted shares can be unrestricted for the information of the shareholders because when Adam and I came to USCA last year and started fielding calls from shareholders this was the single most common question. It was clear from the calls we received that there was a lot of confusion amongst shareholders about what is involved with restricted stock in general and what they must do to un-restrict shares. This is quite understandable as most individual investors never run into the restricted share issue.
Again, let me emphasize, this information was put on the website solely for informational purposes. We, the management, are not investment advisers and we cannot give investment advice. We are NOT suggesting in any way that the holders of stock, restricted or otherwise, should sell the Company stock. What I can say is that we, the management, have been accumulating stock, we have taken the vast majority of our compensation over the last year in stock. Basically it is as though Adam and I have been being buyers of stock for the last 15 months. We see that there are people out there who are willing to sell this stock at 3, 4 and 5 cents and we respect that they are making their own evaluations of what is the best thing to do for themselves, but we certainly don’t take the same view. We believe in this company and we fully expect our investment of time and effort to pay off here. You have to remember Carlain, Adam and I are locked in here. Our stock is restricted for 2 years and even then we will only be allowed to sell 1% every Quarter, so we are in this for the long haul.
It is only in special circumstances such as a buyout offer that I could ever imagine management of any company recommending to the shareholders that they sell their stock holdings. We, the management of USCA, are in no way recommending selling shares of the Company.
2. You were talking about the in ground value of the COD Mine, how do you arrive at that value?
Sure. The COD mine has a considerable history and a fair amount of geological assessment that has been done on it. In the 1970's an estimate was done by Kreigel, in the mid 1980's the owner and last operator of the mine a company known as Alanco did in ground reserve estimates of proven, probable and inferred resources. In 1999-2000 a registered Geologist D.A. Zimmerman estimated the in ground resources to be $138,191,690 with percentage of total values attributable to the component mineral deposits to be as follows.
Gold 22%, Silver, 28.4%, Lead 15.5%, Zinc 25.0%, and Copper 9.0%.
Now in December of 2006 we had a new commercial (not geological) appraisal done on the mine. This appraisal basically sets a fair market price for the mine as is, if someone were to buy it to run it as a business. On a discounted cash flow basis over the life of the mine what is the price that someone could pay which would leave a competitive return to the purchaser over the life of the project. At that time the prices of the minerals had gone up between 33% (Lead) to 99% (Copper) with the three most abundant minerals, gold, silver and zinc having gone up an average of 66.3%. The cost of mining had gone up as well in those 6 years but not as much as the value of the minerals.
This is where we came up with our rough numbers for the in ground value of COD mine being in the 200M range.
It is important to understand that this is a metric used throughout the mining industry. Alone and by itself it is only half the story. One has to calculate the cost of extraction and refining and the cost of capital and apply that to the expected life of the mine Because the COD mine has somewhere in the region of 200M of mineralization in the ground does not mean that we can "transmute" that into 200M in the bank.
Also, since December 2006 Zinc prices have come down, though they are still higher than in 2000, and of course the price of energy, always a major component in any project has gone up significantly. Still, the appraised commercial value of the COD mine is 38% higher (6.8 M USD) as of December 2006 than it was in 2000(5.0 M) and we still carry the property on our books at a value of only approximately 1.7 M USD.
Lastly, I want to make it clear that we regard the COD property as a secondary asset, if you will. COD, along with the processing plant in Buza, Ecuador are virtually the only assets we inherited when we took over management of this company that have any real value. We are looking for the best way to rationalize these values and convert them into shareholder value and that may mean Joint Venture projects or it may mean sales of the assets. Also, you can go to our website www.uscanadianminerals.com, where you will find more information on both the Buza plant and COD Mine.
Of course the other asset that may or may not eventually produce value is the 13.5 percent of future earnings from the CMKX claims that went to Entourage. We are in the process of trying to determine how many of those claims have been maintained by Entourage and what Entourage's plans, if any, are for those claims. It is important to remember also that because of the way the agreement with CMKX was worded USCA gained 13.5% of future earnings, not 13.5% of the claims themselves. If this one day produces value for the shareholders of USCA so much the better but for now it is not.
Our primary goal is to start production on the Chilean gold project, to do real mining producing real cash flow and use that to leverage the Company into other projects we have identified in that country.
3. l am wondering if Rendal Williams or any of the other old management team has anything to do with USCA today. This is a big thing with me,
Rendal resigned on May 5, 2006.
Woodward, Taulli, de Beauchamp, all resigned before we came on board. Once onboard Adam and I put in place new accountants, a new securities lawyer and new auditors. None of the old management now has anything to do with management of the Company, whatsoever. Most of old management do still have shareholdings but they are minor. As shareholders they have the same rights as any other shareholder. The Company is 100% under new management and old management has no input into the running of this Company. We consider USCA to be a new Company.
4. Who are your major shareholders?
As you know, Carlain, we recently negotiated the cancellation of over 39 Million shares of stock and are in the process of working on some further cancellations. This cancellation essentially removed the biggest shareholder. You can look on the company profile on the website and see the Company now has Issued and Outstanding of approximately 70 M shares, but only 12.5 M by our calculation are in the float. We think this is quite a good share structure,
We know of one major individual shareholder who we think is around 14 or 15%.
Langley Park Investments continues to hold shares in USCA (see 04 K and recent Qs) and does not appear to be a seller at this price.
Adam and I, as I stated, have taken virtually all of our compensation in shares. We are major shareholders and will file a form 13 D upon reaching the 10% threshold. Of course all of our holdings are restricted.
These are the major shareholders that we can identify.
None of the major shareholders, as far as we can tell, are names associated with old management. We cannot be sure but we do not believe Urban Cassavant is a major shareholder any more. He does not return our calls and we have ceased trying to contact him.
I hope that answers your questions Carlain. Adam and I are really set on turning the Company in new directions and have been working every day to do so. It is good to hear from you, and I hope all is well in Tennessee .
Best regards,
Bok
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From: C
