Saturday, October 11, 2014

Powertech Uranium Sure Knows How To Pick 'Em When It Goes Looking For Financial Backing.

     Powertech Uranium is the company that wants to drill holes into the southern Black Hills in hopes of extracting uranium from the water in the ground.  It's a process called In Situ Recovery, and some folks, me included, object to the concept because the groundwater is forever altered as a result. I also have some serious reservations about the company that wants to pull this project off--but I'll get to that in a minute.  First off, I note that a 2009 study published by the U.S. Geological Survey concludes that "to date, no remediation of an ISR operation in the United States has successfully returned the aquifer to baseline conditions."  In other words, once the holes are drilled, it's "that's all, folks."  We can never have the water back to what it was like before the hole-drilling began.  I'll let the scientists squabble over the implications.  Me?  I just don't like the idea of Black Hills water resources being forever changed because somebody wants to pull uranium out of them.  I think objections to it by credible experts are enough to put the whole idea into serious doubt.  When it comes to water (Is there anything more precious, especially here in the arid West?), we should err on the side of caution.
     Meantime, local folks should know that the company behind this scheme, Powertech Uranium, is in such shaky financial condition because of the long delays created by fierce opposition to the mine that it has lately sought a "white knight" with deep enough pockets to keep it afloat while the permitting process drags on.  Powertech stock has lost more than 90% of its value since 2011(more like 99% of its value since it was trading at 4 bucks a share in 2007) with its shares trading at 3.5 cents last week.  Even by the standards of its fellow denizens in the nether-world of penny stocks, Powertech's financials are ugly, if not in ruins.  The company first came to my attention a year ago when its 3rd quarter 2013 financial statement was released. In one swipe of the pen, Powertech wrote off 85% (see Note 4 in the financial statement) of what had been one of its centerpiece assets, a proposed uranium mining venture in Colorado.  I'm sure shareholders who thought that Colorado property was a prized asset were devastated by the news, which caused the company's stock to tumble another 80% from its already pathetically low 15 cents/share level.
     Coming on those hard times, Powertech sought out a financial savior, which appeared in the form of an east-Asian based concern called Azarga Resources.  A merger between Powertech and Azarga was announced earlier this year, but the wedding date has so far been put off twice, even as Azarga has been loaning money to Powertech at usurious interest rates to keep the firm afloat.  The intriguing part of this corporate marriage is that a third-party seems to be the real money and controlling force behind it.  That would be the Blumont Group, a troubled Asian mining stock trading on the Singapore Exchange, that took a sizable position in Azarga.  Blumont considers itself the winner in this transaction.  One analyst (sorry, no names, no genders) tells me that Blumont is likely to own about 43% of the mining operation in the Black Hills.
     Owners like this we don't need.  The Singapore-based Business Times, certainly doesn't have much good to say about it.  In a piece that came out yesterday, BT noted that Blumont is one of a trio of mining stocks (all trading for just pennies a share) that "continue to reel from the backlash of crushed credibility."  I mean, "crushed credibility?"  Good grief.  This company has been suspended by the Singapore Exchange and is being probed by the Singapore police over stock-price manipulation and acquisition schemes.  This has been going on for a year now, and no end to the problems seems to be in sight.  And this is the company that considers itself a "big winner" in its efforts to gain control of uranium mining properties in the Black Hills?  I don't think so.  Get these people out of here.

1 comment:

  1. The part of this that so saddens me, John, is like EB-5 and the dairy CAFO operations, and the KXL pipeline, as well as the Keystone pipeline, our State government is willing to bow down to foreign companies and investors to degrade our own environment, instead of in the case of the dairy operations, doing something to help out the existing dairy operations and young would be dairy farmers in our own state.