By Tom Winnifrith, The Sheriff of AIM | Friday 6 January 2017
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
I revealed yesterday how the ramptastic boss at uber-pump Harvest Minerals (HMI), Mr Brian McMaster, had branded Lucian Miers as an "internet troll" for having the temerity to (rightly) call the shares as a sell at 21.5p. The outrageous behaviour of this spivvy promoter makes me look at the shares, now 17.25p to sell, and I have to say that it is "red flags ahoy" - Lucian is 100% correct.
I start with a look at the last annual report covering the year to June 30 2016. The first thing that stands out is the incredible number of related party transactions. In small, cash guzzling, resource stocks that is always a very bad sign and means, for me, that the stock is not one I'd back.
I then find myself struck by the sheer number of ramptastic RNS statements issued by this company in recent months. The Broker is Beaufort. All you need now for that perfect hat-track is to see that Justin The Clown has provided his usual bullish gibberings on a podcast and you have a hat-trick. Sure enough Justin does not disappoint.
I note that in his email to a faithful moron Mr McMaster refused to deny that a placing was looming. His words really were weasel words
Your comments around a placement are noted. Our job is to add shareholder value. It's what you want and it's what I want. Any decisions about acquisitions, placements, divestments, whatever will be made through that prism. The decision won't be made in response to chat room banter.
If you are a moron who has been "groomed" by a promoter (see HERE) you will interpret that cock-talk as meaning "there is no need for a placing". If you are a sane impartial individual you will say "weasel words - placing ahoy" and given the other behaviour patters ( a stream of ramptastic RNS statements, Justin the Clown talking bollocks and the broker being Beaufort) you know that it is a discounted jobby on the way.
And that brings me back to the June 30th financials. At the year end cash was c$2.7 million. In the year just ended operational cash burn was c $2.6 million with another $900,000 spunked on capital expenditure. Given the ( claimed) pace of development cashburn this year will be at least as great and that means that the cash will run out around March 31. Companies do not leave it to the wire to do a placement as that is just irresponsible. So it is an absolute slam dunk cert that it is placing ahoy.
A final note is the statement from the full year results:
The Directors have excluded from this report any further information on the likely developments in the operations of the Company and the expected results of those operations in future financial years, as the Directors believe that it would be speculative and prejudicial to the interests of the Company.
Hmmmmm. What bollocks. The directors decline to elaborate on likely developments in a regulated FY RNS instead communicating to the market their intent via Justin the Clown podcasts and emails to well groomed catamite punters.
Harvest is a slam dunk sell ahead of the placement.
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