Pure Gold Mining (TSXV: PGM) on Monday announced that it had applied for creditor protection under the Companies’ Creditors Arrangement Act (CCAA) with the Supreme Court of British Columbia. Typically, creditor protection, as the name suggests, means that only debtholders get the chance to salvage holdings while shareholders unfortunately typically lose their investment.
This means that billionaire mining financier Eric Sprott, with a stake of 6.7%, second only to AngloGold Ashanti’s 16.5%, would be the second biggest loser in the Pure Gold fallout. The billionaire, according to the Globe and Mail, “could very well” have lost $100 million.
“I don’t think I lost $100 million, but it could very well be,” Sprott said in an interview. “At this point in time, the bigger the better, because it’s a tax write-off. Now that it’s worth nothing, please tell me I lost $100 million or $200 million. I’ll use the tax loss.”
Sponsored · Antimony Resources
Pure Gold, which now only holds about $2 million in the bank, has about $200 million in liabilities. Sprott may not lose it all, it seems. As the junior miner’s biggest lender also happens to be Sprott Resource Lending, a company owned by Sprott-founded Sprott Inc.
Pure Gold Mining last traded at $0.01 on the TSX Venture.
Information for this briefing was found via The Globe and Mail, and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
2 Responses
Hi Richard. I agree with you. The gold is there and the mining infrastructure is in place. They need some financing to really take a run at it. I can’t understand how people and businesses with so much to lose and with so many connections to wealth can’t manage to find backers to get this done.
I don’t have a fraction of the knowledge, insight or skill as Eric Sprott, but I would think if the price of Gold continues to rise as it presently is then there is some hope of Mr. Sprott getting his money out of Puregold mining. With the increase in the price of gold, the company should start to look more and more attractive prospective buyers intuitively anyways. I have a substantial amount of money invested in it also, so I’d interested in the opinions of others.