Sunday, October 30, 2016

Along With Its Mine, Azarga Uranium Brings An Interesting Corporate History Into The Black Hills

     I've been leery of the corporate setup behind the uranium mine proposed for the southern Black Hills ("Dewey Burdock" familiarly, referencing its location near Edgemont) since
Should They Get On That Horse
And Ride Into The Sunset?
January of last year.  
That's when I filed a complaint against Azarga Uranium, the company developing the site, with its regulators the British Columbia Securities Commission.  BCSC has regulatory jurisdiction over the company's securities (AZZ.TO) because its stock trades on the Toronto Stock Exchange. The letter I filed detailed several misleading statements that Azarga had just made in a press release that might have caused investors and potential investors to believe that the process was moving along at a pace faster than it actually was.
     BCSC promptly sent me a form letter acknowledging receipt without further comment and opened a complaint file on the company.  I figured, okay, I did my thing, and doubted much would result. Then, wham, the following April, (and I don't claim credit, I'm just providing the timeline) a chastened Azarga released a statement saying that its Canadian regulators, BCSC, were requiring it to "retract," "clarify" and "remove" several statements from its public report ("Preliminary Economic Assessment") issued at the time.
    On the face of it, Azarga most definitely didn't pass the sniff test.  After official scrutiny, the BCSC saw it the same way.  AZZ.TO has been trading at about 20 cents/share, probably as a permanent denizen of the "penny stock" market.  If you have a broker, you can get an opinion on that
Great Advice
From The People Who Know
(from BCSC)
market from your brokerage firm.  I can tell you that I wouldn't touch it.
    What's intriguing about Azarga now is the status of its largest shareholder.  For the past couple of years, 24% of the company was owned by a Singapore-based firm called Blumont Mining, which in 2014 was targeted by Singaporean regulators and police for investigation of "trading irregularities." I don't know what came of that, but the company last March filed a statement detailing 3 straight years of losses, which is probably why it just unloaded its stake in Azarga to a subsidiary of arbitrage fund Platinum Partners LLP in New York.  And that's another story: Platinum
Partners is currently under investigation by the Securities and Exchange Commission and the U.S. Department of Justice after the arrest of one of its associates for wire fraud.  The firm is also liquidating.  How that will affect Azarga and its long-stalled hopes of developing its mine in the Black Hills remains to be seen. I'll watch and comment as things develop.

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