|Azarga's Biggest Shareholder|
The Company They Keep?
Now it comes out that the partners at PP a few days ago were charged with fraud. The 49-page indictment is consistent with the claim that the fund was effectively a Madoff-style Ponzi scheme. Guilt has yet to be decided via due process, but if the facts in the indictment are accurate, this is an outfit that was on the ropes and desperate to cover up its hopelessly mangled finances. It holds a 30% stake in Azarga that might have to be liquidated. Dumping all that stock on the market would be some tough news to beleaguered Azarga shareholders who've already watched the stock price go from around $40/share ten years ago to 25 cents/share today. A massive wave of selling is likely to put even more downward pressure on the stock. Azarga's 2015 annual report, issued last March, includes a cautionary statement by its auditors that "material uncertainties" in the company's financial position "cast significant doubt about the company's ability to continue as a going concern." (Italics mine.)
The combination of the long delays in the permitting process to get the Black Hills (known locally as "Dewey-Burdock" for its location) mine operating and the crushingly low price of uranium, which hasn't recovered from the pounding it took after the Fukushima nuclear reactor disaster in Japan a few years ago, has been devastating to Azarga's fortunes. Its stock now languishes in the slums of the