Wellgreen Platinum (V.WG) pours cold water on Seeking Alpha stock booster

Chris Parry Chris Parry, Stockhouse.com
3 Comments| January 31, 2014


An exceedingly positive article from Fincom Investment Partners posted to SeekingAlpha.com regarding Vancouver-based Wellgreen Platinum (TSX:V.WG, Stock Forum)  last week drove significant share increase in that company’s stock.

But Wellgreen released a statement after the close of trading Friday that sought to distance the company from the third party analysis, saying it “contains certain viewpoints and information relating to the Company's Wellgreen project (including, but not limited to, assumptions relating to internal rates of return, power costs and capital expenditure requirements) which are not supported by the Company's 2012 technical report.”
 
“The Company cautions investors that, for technical and economic information regarding its Wellgreen project, they should rely solely on the 2012 Wellgreen PEA and the Company's public disclosure documents.”
 
According to the analysis, Fincom had completed a 5-month investigation concluding that Wellgreen possessed the best Risk vs Reward in the platinum/palladium sector that, at current prices, presented a multiple opportunity.
 
The coverage stated, "we are pleased to 'put forward' Wellgreen, which actually contains more Palladium than Platinum ounces, as a unique, timely and special opportunity; a best-of-breed combination of excellent management, near term re-rating catalysts, and a chart which has been quietly basing for 10 months."
 
What drew concern for Wellgreen was the statement, “Using a Capex of $300 million and an IRR of 30%, there is an expectation that the mine will have an annual $105 million return and at Wellgreen's present value of $50 million, that's a 200% return on just the initial stage of the project.”

That analysis appeared to drive shares up some 43% over 48 hours and, though a 10% drop brought the stock back to $0.90, it has remained at a level some 30% over the pre-Fincom price since.
 
Fincom’s assessment may well be correct - there’s just no regulator-approved way to know, which makes basing investment decisions on the opinion inherently dangerous.
 The company is in no position to back Fincom’s statements, being tied to the existing 2012 NI 43-101 until such a time as an updated resource estimate is posted.
 
The existing company presentation, with approved data, can be found here.


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gamethrones
mining for a few months in 1970's, the federal mineral mines index listed the deposit as erratic, hence the mine shutdown in early 1970's, that mentioned in the "research"?
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February 2, 2014
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eodway
They are no longer looking at Wellgreen as an underground mine but as an OPEN PIT.
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February 2, 2014
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jjeeddoo7
the ore deposit will double in size with the new 43-101 and new PEA due out will support much of the article...that is if you can read assay and drilling results and comprehend the technology of today, will be one of the top producers in North America...article nails that it will be a multiple bagger.
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March 18, 2014
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