By Doc Holiday | Thursday 13 November 2014
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.
One of the saddest parts of being a financial commentator when you unearth facts which don't quite compliment the belief mechanism of either shareholders or traders. Often the level of misunderstanding is so great that it becomes hard to know where it starts and ends. I'm not going to overload investors today with all the facts but perhaps enough for people to question the presentation of operations, investments and ability of Stellar Resources (STG), an AIM listed creation of David Lenigas.
For a long time I've commented that Stellar Resources only real near term material assets were Horse Hill which has not exactly gone to plan and a 49% stake in Gold Mines of Wales (GMOW). GMOW is the operator of the Clogau gold mine in Wales - its licence encompasses a vast footprint of North Wales. GMOW is almost out of cash.
Ok so this simple parts of the two companies is pretty straight forward yet since my investigations started a few (I believe) significant changes have taken place: -
Most recently GMOW’s on site caretaker (local manager Ray Roberts) who has been overseeing day to day activities appears to have started work elsewhere. Two directors have stood down from the Stellar board recently (Ed McDermott & Lenigas) leaving investors perplexed.
Little progress has been reported from its coal assets which ironically have a common denominator Lincoln Moore (Ex- Stellar director) nor has there been any advances in the companies mining of gold. This is due to the company not having a crown lease for extraction, in actual fact it is my belief that the company is only permitted through its '' exclusive option '' to explore, then test viability.
Information and data would then be used to secure the further licence to extract once planning permission was granted. The company has put into a practice a relatively basic sampling program which has yielded the publicly announced gold results by way of grab sampling, this is collecting residue from broken ore piles, mine trucks and the like (also known as muck sampling) grab sampling is used for grade control whilst mining but results within the local mines were considered to be too far from the actual mined grades so the bulk sampling or 100kg micro bulk sampling could have been a better way of sampling.
Results via RNS publications showed results of up to 24 oz's per ton, It's my belief that investors have cleverly been presented with progress reports either through the official lines or social media which has clouded the facts leaving P.I's dreaming of Eldorado. Sadly the misconception is the company can, drill mine, extract or sell gold as a tangible/commercial material business and this is not the case in its current format. This video of the site shot the other day suggests it is less than a hive of activity. The leaves on the floor seem undisturbed
So to recap you may have a lot of paper potential but today it holds little tangible worth. I have spoken to a geologist who had some knowledge of the area and whilst I concede some of what I suggest may not be point perfect I'll paint a true picture of the geology of the mine. The mineralisation is sparse yet potentially rewarding, this would mean that you could hit rich veins of mineralisation (Gold) however not before needing to remove hundreds of tons of barron ore, it is this reason that commercial mining at Clogau ceased in the 90's. This presents its own obstacles to anyone looking to re-enter the mine since the last commercial operation would now need to get the relative authority to mine (properly) and also accept that the work is likely to be arduous, heavy and hard.
I now draw your attention to the GMOW directors via Allied Inv. Trust of 5 Bond Street, St Helier, Jersey
The Company shares its address with Exchange Minerals, A company that employed disgraced Australian broker Damien Conboy (struck off for 2yrs) amongst others. Conboy – driven out of his job at AIM listed Alecto by my pal the Sheriff of AIM Tom Winnifrith thanks to this sort of revelation, was also a director of Strait Oil & Gas which signed a heads of terms in 2009 with Range resources for the private UK company’s Georgian assets. Range also employed Michael Povey as Chairman and later Managing director, Mike currently sits as general manager at GMOW. The musical chairs in this industry ae incredible and one common denominator is '' lack lustre '' performance or worse!!!
One of the more poignant comments I make personally was those of a certain David Lenigas to my old pal Tom Winnifrith with relation to a personal encounter I had with some unscrupulous sorts. This chaining of event will start to show the extremely close relationship between a so called fund manager and David. Whether TW felt Davey was twisting his tits when he proclaimed that this verminous individual passing out threats wasn't someone he knew really well I do not know. But was he just a fund manager he kept at “arm’s length.'' Funny how he forgot to mention that this individual was in fact the beneficiary to of the Allied Inv.Trust and Exchange Minerals which is also the same directorship body (GMOW) holding 51% of the Clogau gold mine.
This is not some rapid fire attack or a dismantling of a racket, its simple the first step in what should be an investor revolution I call upon ordinary investors to take up a voice in challenging the very people that are not, and should not be allowed to run such companies in this manner. To seek out the truth.
The way the companies are formed and with the people involved I can see only one outcome, which involves a systematic change of the guard which plays the same game.
Don't be surprised to see the coal becoming a focus now the rest is going stale - KNOWTHEGAME
We each have the ability to make a small difference but together we can force change, the small skirmishes on the battlefield can lead to the winning of wars. I believe that unity in the retail community is now paramount so call on you to take up arms before the next instalment of revelations.
Call Stellar and ask it about these interlinked individuals and more importantly to clarify whether its gold asset in Wales is in fact a total write off and if so why investors have not been kept informed
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