First off, pending approval by Toronto Stock Exchange regulators, the new business combo will be known as Azarga Uranium Corporation (known as Powertech/Azarga here for the time being), Azarga Resources being a company whose head, Alex Molyneaux, resides in Hong Kong. On the face of it, this merger, technically known as a "reverse takeover"--I'll spare the financial gobbledygook after this--seems like a simple enough transaction. Prior to it, Powertech was on the financial ropes. Along came Azarga Resources to the rescue, in the process picking up the company's plan to mine uranium in the southern Black Hills of South Dakota using a controversial method called in situ mining that will alter the region's groundwater forever.
Dubious as I am about the scheme, I'll set it aside here and let the scientists hash it out. I'm more skeptical about the business structure that Powertech/Azarga has created with this merger. Turns out that one of the biggest stakeholders in the deal is a Singapore-based outfit called Blumont Group, Limited.
Blumont has ties with Azarga and touted itself as the "big winner" in the deal. I know it's a head-scratcher, but there are multiple levels of international corporate intrigue going on here (I mean, we're talking Hong Kong, Singapore, Toronto, The British Virgin Islands and--oh, yes--Edgemont, South Dakota.) and you're just getting a distillation. Anyway, Blumont is a company that is now in deep regulatory trouble with Singapore's financial overseers following a huge drop in its stock price last Fall, wiping out billions of dollars of shareholder equity. Singapore's "white collar crimes" police unit is all over this company, its principals, and its records. Most intriguing is that one of the company's consultants and "key advisors" is none other than Mr. Alexander Molyneaux.
Molyneaux is now apparently the man who will take charge of the Black Hills uranium-mining interests of the Powertech/Azarga combo. This strikes me as a little weird and a whole lot unnerving. Do we really need to upset the tranquility of the Black Hills by bringing this cast of characters into them?