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Reality: Oil is essential – worldwide.    #oil

Successive Canadian governments (Liberal and Conservative) have proven completely inadequate at anticipating and providing for world events over which we have no control but that can affect our ability to operate.

Does anybody:

1) notice the growing problems in the Middle East?

2) wonder why we continue to have such heavy reliance on Saudi oil? (we paid to import $3.6 billion in 2018)

3) really think that any of the people up for election have the understanding and capability to get us out of this mess?

If you answered ‘yes’ to 3, please contact me as I have a bridge to sell you.

Who Should Be Interested In Market Scam[s] Of The Year?

Yes, we’re talking the BridgeMark Group and who should be interested:
For starters, those who bought into the private placements of the companies involved and those who owned or bought shares in the companies involved. It would be a good idea to contact Paul Bennett pb@hbmlaw.com 604-639-3668 as he is launching a class action suit

Next we have a veritable alphabet soup including BCSC, CSE, TSXV, CPABC, BCREA, CNV, CRA
A comment on each:

#BCSC [BC Securities Commission]: highly motivated, but operating under certain limitations. See my post of 26 June 2019.
#CSE [Canadian Securities Exchange] and #TSXV [Toronto Venture Exchange]: highly motivated to oust the crooks and the dummies who enabled them.
#CPABC [Chartered Public Accountants of BC]: should be extremely interested in helping weed out its members who played key roles in this scam and have put the profession in disrepute, but so far apparently has been doing nothing (in hopes that the scandal will go away?). Weak move, or lack of move. Disclosure: I am a CPA, CA.
#BCREA [BC Real Estate Association]: not sure if it has done anything yet.
#CNV [City of North Vancouver]: Its ex-Chief Administrative Officer, [Ken Tollstam, CPA, CA], was in the thick of things and working as CEO or CFO of several of the miscreant companies while still ostensibly working full-time at the CNV. I wonder what computer[s] he was using?
#CRA [Canada Revenue Agency]: haven’t heard anything yet, but the chances of generating some lucrative recoveries should mean it won’t stay on the sidelines forever.
#BC Civil Forfeiture Office: it is already involved as you can read in one of the links in the summary below.

There’s an excellent summary of the goings-on here
https://www.nsnews.com/search-results-7.6424?q=bridgemark with multiple links.  Thanks to the North Shore News!

The most active parties at the moment appear to be the various and numerous lawyers who have taken on the task of somehow enabling their clients to escape the consequences of their actions. Party on, and charge your clients a fortune. Just remember to collect now while they can afford to pay you.

Looks Like The Fun Is Beginning

After years of hearing all the bullshit about ‘gold being manipulated’; ‘gold must go up because it’s got a mind of its own’; ‘gold is money’; ‘gold must go up because the charts say so’; etc, here’s the reality today:

It appears that the trade ‘wars’ involving or potentially involving the world’s four largest economies are being converted to currency wars. That fact, along with the volatility associated with the oil price due to the war on it by environmentalists and the effects of actual nation-vs-nation tensions that may become war, makes me think that gold is going UP.

UP, as in the price of the real stuff, the price of the shares of those that produce, and even the price of shares of some that explore.

Don’t ask me how high, but don’t observe from the sidelines and then moan that you missed the boat.

#gold

‘Promotion’ Disguised As ‘Research’

Comprehensive Research put out a June 19 recommendation of Viva Gold [VAU: TSXV ~ target price .95!]. It was promoted to me via Facebook and unsolicited email.

First thing I did was look up ‘Comprehensive Research’ to see what it was all about. The self-description on the website sounds pretty lofty,

“Comprehensive Research is a leading, independent economic and financial research agency focused on providing non-biased information.
Why research independently? The potential problems researching through other formats can lead to a lopsided viewpoint, depending on who is paying for the research.
Independent research aims to educate a broader audience and holds a high ethical standard to ensure the integrity of the information presented.
Our core business has been to provide economic and financial research to educate and inform our clients, such as asset managers and institutional investors, to help optimize management decisions.
Whether you are an individual investor, company, or organization, we provide an in-depth analysis to better educate your investment decisions.”

but, of course, a questioning mind will be bringing up the challenging question of “then who pays for the research?”.

I wrote the following to Christoph at Comprehensive Research, with a copy to James Hesketh at Viva Gold:

“…seeing as you have “a powerful grip of the financials” (<– your description on your web site), I have some relevant questions about why you recommended VAU.

1) The company is a ‘zombie’, the name I use for companies that do not meet the Continued Listing Requirements of the TSXV per its Policy Manual 2.5 > 2 > 2.1, and is, therefore, subject to the immediate discipline of the TSXV per 2.5 > 3 > 3.2. Relying on the neglect of the TSXV to follow its own policies is no excuse for an ‘analyst’ not recognizing the precarious position the company is in.

2) It’s interesting to see that a company with little cash shows Receivables and Prepaids of $28k per the 31 Oct 18 audited financials and $248k on the interim financials three months later, with no explanatory note. Minor numbers compared to the Bridgemark scams still to be resolved by the regulators, but enough to generate attention. Did your analyst find a satisfactory explanation?

3) Does your analyst really believe that the company has ‘Exploration assets’ of $749k? A reading of the audited financials shows that per note 6, the ‘asset’ is made up of $100k cash for acquisition and royalty modification (both of which are highly subjective), $495k in shares for the royalty modification (what are those shares worth today if the holder hit all bids with 1,500,00 shares?), and $155k for a reclamation fund that has subsequently been reduced by approximately half due to conversion of cash backed reclamation bonds to reclamation surety bonds. This arrangement results in a monthly fee payable to the insurance company. Should the $76k cash realized be used to reduce the ‘exploration asset’?

What importance should your analyst have given to the notes to the financials, which include the following:

“Exploration and evaluation assets are tested for impairment if sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale. An impairment loss is recognized if it is determined that the carrying value is not recoverable and exceeds fair value.”
Are there really any exploration assets at all?

4) Now that VAU has cut the price of its announced pp but used the same number of units, the $ amount of the pp is reduced by 20% ($350,000). Presumably, that reduction will directly impact the amount spent on exploration. Given the restricted amount to be spent on exploration, and that share price is normally driven by results, how does your analyst come up with an increase in market cap of +/-$18M (target price $0.95) based on approx $1M of exploration work? That ratio would normally be considered absolutely unattainable.

5) June 19, the day CR issued its recommendation, the stock has been trading for the past week at less than the announced unit price, and is currently bid .28, ask .30.

All of which brings me to my last question:
Did CR get paid for issuing this recommendation or the recommendation done in January?

Your disclaimer conveniently bypasses that possibility:

“Copyright © 2017 Comprehensive Research Corp., All Rights Reserved. The opinions expressed in this report are the true opinions of the analyst about this company and industry. Any “forward looking statements” are our best estimates and opinions based upon information that is publicly available and that we believe to be correct, but we have not independently verified with respect to truth or correctness. There is no guarantee that our forecasts will materialize. Actual results will likely vary. Comprehensive Research “CR” and its shareholders may or may not own any shares of the subject company, may or may not make a market or offer shares for sale of the subject company, and may or may not have any investment banking business with the subject company. The analyst does not own any shares of the subject company, does not make a market or offer shares for sale of the subject company, does not have any investment banking business with the subject company. Comprehensive Research expressly forbids its writers from owning or having an interest in any security that they recommend to their readers.

Reading through the Viva ‘analysis’, one can find the following, midway through the fine print:
           “Fees were paid by the subject client to CR.”

They have had a week to answer, but no answers have been forthcoming.

Scofflaws Are Winning; But Will The Rules Change?

Fines, restitution and disgorgment orders close in on $200 million in white-collar crime cases, but collections a different story: CSA

According to provincial regulations, if the BCSC collects on a fine, the GROSS amount of the collection has to go into a fund for educating investors. 100%. Well-meaning, but it doesn’t work at all. Let’s say the BCSC hired collection agencies, lawyers, or even the Mafia on a 30% contingency basis. That process could be very effective at generating $$$$ and deterring future scofflaws.

So what’s the problem? If those collectors were successful in recovering $100 million, the BCSC would go broke because it would collect $100 million, all of which would have to go into the educational fund, and it would have to pay the collectors $30 million out of its relatively meagre legal budget. Can’t be done.

The higher the fine, the safer the miscreant. The BCSC can’t hire anyone on contingency to go collect. When you see a Financial Post story describing “closing in on $200 million”, you know a lot of guilty parties are laughing.

A conspiracy theorist could say the rules have been set up by crooks to help crooks avoid penalties, but let’s call it “unintended consequences of a well-meaning law”. It’s actually a simple problem that can be solved with a figurative “stroke of the pen”. No rocket science needed.

A change in rules to make the education fund the beneficiary of the NET amount of fines collected would create an immediate and significant problem for the scofflaws.

I’m sure the BCSC would like to see the rules change before it starts handing out penalties to the Bridgemark scammers among others.

Come on, government. Now that you understand the problem, do something about it!

Purity of Heart Produces The Strength of Ten

A month ago, my wife informed me she wanted to pick her own stocks. Then she got into Beyond Meat [BYND] on the first day of trading, not necessarily for investment purposes but because she insisted on showing her support for the company.

What can I say? I’ll leave it to her. Here is an excerpt of what she wrote to some friends and connections in her animal rescue world:

“A number of us have been focusing on the changing revolution that is happening in food production. Although there have been some vegan and vegetarian products available in Canada for years, it was very low key and not at all mainstream. The media has really picked up on the successful launch of “Beyond Meat’ and suddenly the marketplace seems to have exploded with news of all sorts of companies wanting to have plant-based alternatives to meat. The grocery store retailers and buyers have been slow to recognize the growing trend for the last 5 – 10 years and have been caught by surprise with the demand for plant-based items as opposed to meat. Certainly, the beef and dairy producers were a bit under pressure the last few years with declining sales due to the introduction of soy-based products but I don’t think the meat industry was expecting a tsunami this big for the move away from meat.

With the widespread publicity of emphasizing multiple benefits from plant-based meat’ substitutes, the public has been educated quickly about how much large scale animal agriculture is depleting our resources, how plant-based is healthier without the antibiotics and GMO’s that are typically found in meat products, and how much cruelty is going on in factory farming and slaughterhouses of big animal agriculture. Almost daily there are several news stories about the ‘food revolution’ that is taking place – and people are noticing. It’s a current topic on many people’s minds.”

VEGAS DEALS

Just got back from Las Vegas where I was at ‘The Deal Room’, a personalized investment conference organized by Jay Martin and his team at Cambridge House. It showed that there is a way for everyone to leave Las Vegas as a winner.

There were thirty-six public and private companies, about evenly split among mineral exploration, cannabis, and technology. They got a chance to meet with a selection of relevant investors that Cambridge flew in and hosted. Forty-two people encompassing high net worth individuals, brokers, family offices, and institutional funds. Vancouver, Toronto, New York, Europe, Hong Kong – an interesting and select group.

The venue was the Cosmopolitan Hotel – excellent in every way and the Cambridge team had things organized to the nth degree.

Call this ‘Vegas Deal Room’ an unqualified success. Companies, both public and private, should be fighting to get on the list for the next one.