"1848 and
Beyond"
posted
August 4, 2005
"An
African Queen"
posted August 11, 2005
"Near Hit"
posted August 16, 2005
"Orko
Gold"
posted August 18, 2005
"Mr.
Smith Goes To Hungary"
posted September 1, 2005
"A
Letter To
President Bush"
posted September 8, 2005
"Mr
Clarke -
Call In The Boys"
posted September 12, 2005
"Orezone"
posted September 23, 2005
"U.S
Gold Corp."
posted September 29, 2005
"Mr.
Prime Minister"
posted October 13, 2005
"The
Business of Hungary is Business!"
posted October 31, 2005
"Then
And Now"
posted November 9, 2005
"50
Relatives Worse Than Yours"
posted November 14, 2005
"Bunker
Hunt-Silver-China"
posted November 28, 2005
"The
Currency of Mass Destruction"
posted December 5, 2005
"Sonesta
International Hotels Corporation"
posted December 29, 2005
"Northern
Star Mining"
posted January 16, 2006
"Other
People's Money -Enron & Martin Siegel, Esq."
posted January 28, 2006
"Your
Money Is Not Yours"
-Enron & Martin Siegel, Esq.
posted February 9, 2006
"A
Tribute to
Rudy Giuliani"
posted February 15, 2006
"Interview
with
Robert McEwen-
U.S. Gold Corporation"
posted February 22, 2006 |
|
BERAL,
INC.
Andrew G. Racz
Director of Research
300 East 54 Street, 26C
New York, New York 10022
Telephone: (212) 319-6949
Fax: (212) 753-1944
| INTERVIEW
WITH
ROBERT McEWEN
CHAIRMAN OF THE BOARD
U.S. GOLD CORPORATION |
|
USGL
- U.S. Gold
Price:
$4.85
Price
range: 604 - $5.55
Debt:
0
Shares
outstanding: 50M
Warrants:
$8.50 ($10,000)
|
|
February, 2006
ANDREW RACZ: When we analyzed on Wall Street some of the
conglomerates in the past who made various steps and takeovers,
sell-offs, a friend of mine, a money manager, said the only
way to analyze this company is if you get into the mind and
the brain of the chief executive, who was heading those companies.
This is the case with U.S. Gold. Unless somebody can understand
you, they cannot analyze the company. Is that correct?
A: To a degree, yes.
| Rob
McEwen Becomes U.S. Gold's Largest Shareholder |
| Denver,
Colorado, July 29, 2005 -- U.S. Gold Corporation(OTC
BB:USGL) is pleased to announce that Rob McEwen
has purchased by way of private placement with
the company, 11.1 million shares for $4,000,000,
becoming the company's largest shareholder with
33.3% interest. It is planned that Mr. McEwen
will be assuming the role of Chairman and CEO
shortly following the planned resignation of
current management. Over the past twelve years,
Mr. McEwen turned Goldcorp Inc. (NYSE:GG; TSC:G)
from an investment company with a market capitalization
of $50 million into a mining company with a
market value of $5.4 billion today. |
|
| Q: First let's go to the beginning.
What was your concept of setting up U.S. Gold? |
| A: To create the premier exploration
company in Nevada. In essence, having an exploration company
with a land holding equal to that of a major and an exploration
program equal to that of a major gold mine, with a market
liquidity of an intermediate and the up side of a junior
exploration company. I am talking about Barrick, Placer
Dome (Table 1 - Capitalization). |
Q: So we go to Nevada and you
are competing with the Hungarians. |
| A: All right. |
Q: How much is the capitalization
of Barrick? |
| A: Probably around $20 billion now.
|
Q: And your capitalization? |
A: We just completed an issue, raising
$75M Canadian, or will be shortly.
It'll be about $200-250 million. |
Q: So in other words, $20 billion
versus $200 million. |
| A: Yes. |
Q: And you are saying that if
you have as much territory in Nevada next to Mr. Monk's
company (Barrick Gold), you have a fighting chance. And
if the chance works, the numbers can be impressive.
|
| A: Yes. They would own more property
than we do today, but we'd have a very large land position
in Nevada in a very prospective area. |
Q: Why didn't anybody buy this
out before you? |
| A: There are a couple of reasons. The
property itself had been tied up through a series of joint
venture partners for about the last ten years, and it
only came out of a joint venture in the spring of
last year. Then it was quickly entered into a proposed
three-way merger. That parties proposing the merger were
underfunded and that presented the opportunity to me,
and I went in and offered the company capital that wasn't
available to the proposers of the three-way merger. |
Q: Altogether, I added up that
you spent approximately $25-30 million in getting involved with
six companies. |
|
Rob
McEwen to purchase up to 1,250,000 shares in
Coral
Gables Resources, Ltd., becomes a Director and
Executive
Chairman of the Board |
| Coral
Gables Resources Ltd.
has arranged a non-brokered private placement
of up to 1,500,000 common shares at a price
of $3.00 per share. The placee for up to 1,250,000
shares is Mr. Robert McEwen and upon closing
he will hold just under 20% of the outstanding
shares. The net proceeds of the offerings will
be used for additional exploration and development
work on the company's mining properties and
for general working capital requirements. |
|
| Robert
McEwen joins Tone Resources,
Teck
Over Subscribes Private Placement |
| As
previously announced on November 30, 2005, Tone
Resources Limited is arranging a private placement
of 3,000,000 units. The company is pleased to
announce Robert McEwen has agreed to subscribe
for 2,500,000 of the units. In addition, the
company is also pleased to announce the private
placement has been increased to 3,300,000 units
to accommodate pre-existing financing rights
held by Teck Cominco. The private placement
is subject to regulatory approval. |
|
| Rob
McEwen to invest $1.5 million in Everton Resources
to
accelerate its exploration program |
| Everton
Resources Inc. is pleased to announce that,
subject to regulatory approval, it has entered
into an agreement with Mr. Robert McEwen of
Toronto, Ontario to issue 3,000,000 units at
a price of $0.50 per unit for aggregate proceeds
of $1,500,000. Each unit will consist of one
common share and one common share purchase warrant.
Each whole share purchase warrant can be exercised
into one common share at a price of $0.70 per
share for a term of 18 months. The net proceeds
of this offering will be used to finance exploration
work at Everton's Opinaca and Wild Cat gold
projects in the James Bay region of Quebec and
also Everton's gold and copper portfolio of
properties in the Dominican Republic. |
|
| Acquisition
of Shares of Lexam Explorations, Inc. |
| Toronto,
Ont., September 1, 2005 -- In accordance with
regulatory requirements, Evanachan Limited,
a company wholly-owned by Robert McEwen, announces
that he has acquired 18,990,641 common shares
of Lexam Explorations Inc. from Goldcorp and
one of its subsidiaries for aggregate consideration
of $399,999. These securities represent approximately
49.8% of the issued and outstanding Lexam common
shares. Mr. McEwen is the Chairman and CEO of
Lexam and is the Chairman of Goldcorp. Evanachan
and Mr. McEwen now hold an aggregate of 19,101,752
common shares of Lexam, which represents a 50.1%
interest in Lexam, on an undiluted basis. |
|
| Rob
McEwen Acquires 18.2% Stake in Nevada Pacific
Gold |
| Nevada
Pacific Gold Ltd. is pleased to announce that,
subject to regulatory approval, it has entered
into an agreement with
Mr. Robert McEwen of Toronto, Ontario, to issue
12,5000,000 units at a price of $0.40 per unit
for aggregate proceeds of $5.0 million. Each
unit is comprised of one common share and one
common share purchase warrant, each warrant
exercisable to acquire one common share of the
company at an exercise price of $0.50 per share
for a term of two years.
As
a result of the private placement, Mr. McEwen
will hold 18.2% of the outstanding shares of
the company and, in the event of exercise of
all of the warrants, Mr. McEwen will hold 30.8%
of the outstanding common shares of the company.
In accordance with rules of TSX Venture Exchange,
as this constitutes a "change of control", the
placement will close in two tranches, the first
being for 6,921,213 units and the second tranche
for the balance of the units will be conditional
upon receiving shareholder approval. The company
has called an extraordinary general meeting
of shareholders to be held January 23, 2006
for the purpose of approving the second tranche
of the private placement. |
|
| Robert
McEwen Purchases Shares in
White
Knight Resources Ltd. |
| Toronto,
Ont., July 5, 2005 -- Robert McEwen announced
that he has purchased today an additional 2,270,700
common shares of White Knight Resources Ltd.
in the market. The purchase price was averaged
at $0.91 per share. Mr. McEwen now owns 7,952,427
shares of 14.7% of the outstanding common shares
of White Knight. These shares were purchased
for investment purposes. |
|
| Robert
McEwen Purchases Shares in Guyana Goldfields,
Inc. |
| Toronto,
Ont., July 5, 2005 -- Robert McEwen announced
that he has purchased on June 29, 2005, 650,000
common shares of Guyana Goldfields Inc. in the
market. The purchase price was averaged at $2.55
per share. Mr. McEwen now owns 4,555,811, or
11.6%, of the outstanding common shares of Guyana
Goldfields, Inc. These shares were purchased
for investment purposes. |
|
|
Robert
McEwen agrees to invest a total of
$10
million in Minera Andes |
| Spokane,
WA - December 21, 2005 -- Minera Andes is pleased
to announce that Robert McEwen has today subscribed
$5,395,159 Canadian for an aggregate of 15,414,740
units issued by way of private placement. Excluding
warrants, completion of this subscription makes
Mr. McEwen our largest shareholder with a 14.2%
interest. Terms of a second private placement
have also been agreed to with Mr. McEwen that
would make his total investment $10M Canadian.
The second private placement of 13,156,689 units
will only close 61 days after receipt of approval
from the shareholders of the corporation for
the placement and for the waiver or repeal of
Minera Andes' shareholder rights plan as it
applies to Mr. McEwen. Excluding warrants, completion
of the second placement would give Mr. McEwen
a 23.5% shareholding in Minera Andes.
Proceeds
from these two private placements will be used
for further development and exploration of the
advanced-stage, high-grade San Jose gold/silver
project in southern Argentina. A positive bankable
feasibility stud for the project was released
October 24, 2005 and permitting, advanced engineering
and other work is currently underway. At San
Jose, a work force of 330 is developing the
underground workings exploring the main gold/silver
vein. Proceeds will also be used for general
corporate purposes and for exploration at the
Los Azules copper discovery in west central
Argentina, in accordance with Minera Andes'
recently announced letter of intent with Xstrata
Copper Americas. |
|
|
Original
investments (see above)
Compounding
value of warrants |
$30M
$15M
$45M |
| Current
market value (combined) |
$100M,
approx. |
| Total
market value of above companies |
$500M,
approx. |
| Fully
diluted market cap of USGL - 50M shares |
$250M |
| Less
$75M |
$175M |
| 50M
shares of USGL ($5) -- controls
$
75M cash
$500M
marketable securities |
|
|
| A: Right. |
Q: Corale, White Knight. |
| A: United Pacific. |
Q: Then the big one. |
| A: Then there was one in Argentina,
Andes. |
Q: In other words, you spent let's
say $30 million. The warrant would make it another $40-50
million. Market value has gone up. So let's say the investment
is worth $100 million, which is 50% of your total capitalization
of U.S. Gold. |
| A: Right. |
Q: The other fact is, however,
if we expand the total capitalization of these companies,
it's not $100 million but probably well over $500 million.
Correct? |
A: If you combine all the companies? |
Q: You invest $30 million. The
warrants would be another $45 million. That's $75 million.
But the total capitalization of these six companies in
today's prices -- the total, not what you own but the
total -- is probably over $500 million. |
| A: It's approaching that, yes. Or over
that. |
Q: In other words, your $200 million
market cap of which $75 million is cash, the $125 controls
$500 million marketable gold securities and all the potential
gold production or reserves, what you will find. To go
a little bit further, the price of gold is higher than
a year ago. If they all drill and the reserves are established,
the value could go from $500 million to one billion dollars.
|
| A: It's possible, yes. |
Q: That's an issue of 5 to 1,
compared to the $200 million market cap. |
| A: Yes. |
Q: These are all facts, okay?
|
| A: The warrants that you mentioned
are all in the money. The total investment would be about
$45 million. |
Q: With the warrants? |
| A: With the warrants. |
Q: All right. But you can say
that the value at the moment is $100 million. |
| A: Yes, you could say that. |
Q: And the total is still $500
million. |
| A: Yes. |
Q: And the potential with gold
can bring it up to one billion. |
| A: Yes. |
Q: At the moment, this is on the
map. Very soon you will have $75 million U.S. It will
be in your company when? |
| A: The 22nd of February. Next week. |
|
U.S.
Gold Corporation announces increase in proposed
offering
to U.S. $75.15 million by over-allotment
|
| U.S.
Gold Corporation is pleased to announce that
its previously announced private placement of
U.S. $50.4 million has been increased by reason
of an over-allotment to 16,700,000 subscription
receipts for aggregate proceeds of up to U.S.
$75.15 million. The subscription receipts will
be sold at a price of U.S. $4.50.
The
remaining terms of the proposed offering remain
unchanged. Each subscription receipt will be
automatically converted into one unit, subject
to adjustment and dilution penalties in certain
instances, upon the satisfaction of certain
stated conditions. Each unit shall be comprised
of one share of the company's common stock and
one-half of one common share purchase warrant.
Each whole warrant will entitle the holder thereof
to purchase one common share for a period of
5 years following the closing of the offering
at a price of U.S. $10.00. The escrow conditions
include, among other items, the filing of a
resale registration statement in the United
States and (final) prospectus in Canada qualifying
the securities underlying the units and the
listing of the common shares on the Toronto
Stock Exchange.
The
net proceeds from the offering will be used
for the exploration and development of the Tonkin
Springs gold project in Nevada and for general
corporate and working capital purposes. |
|
| Q: So in other words, when you walk
into the office on the 23rd of February, you can write
a check for $50 million to anybody. |
| A: Well, 50% of the money is escrowed
until we achieve certain goals. We have to get the stock
registered with the SEC and we have to get listed on the
Toronto Stock Exchange. Other than that, yes. That might
take four months. |
Q: For the escrowed money? So
half of the money is available in late February. |
| A: Yes. |
Q: It is free and clear. |
| A: That's correct. |
Q: This game now converts into
a chess game. Because you can issue new shares to expand
a totally new company. You can use the cash and notes
or stock again to buy another gold company other than
the nine which are on the map. If U.S. Gold happens to
go up from $5 to $8, you can make some exchange offer
with any of these six and bring it into the corporate
umbrella. |
| A: Yes. |
Q: If you are as lucky as the Hungarians,
you will bring into the fold the one which is making
the greater progress (referring to Peter Monk, chairman
of Barrick Gold, the largest gold company in North America.
He is of Hungarian birth.)
|
| A: Yes. |
Q: So that would create a higher market value
at the parent level, and you still have those nine companies
which you tied up and additional companies which you might
buy. And each of the gold production or established reserves
accrue to the parent company. |
| A: Yes. |
Q: What is your policy? |
| A: With respect to? |
Q: I described my own theories.
Do you have an established policy of how to go from here? |
| A: When I made the investments
in all of the companies, I said what I wanted to create
was a larger exploration company that would become the
premier exploration company in Nevada. In order to do
that, you would take these various companies and roll
them together, consolidate them into one entity. That
new entity would have a large land package, a large treasury,
offer better market liquidity, but still retain the up
side of being a junior that would come if you had a discovery.
It's located strategically in a very prolific area for
gold, right next door to a major discovery. Everybody
who had worked U.S. Gold's property in the past had been
looking for shallow deposits. The target we're looking
for is deep deposits like the discovery next door. The
discovery next door added about $4 billion to the value
of Placer over a period of six months, while this discovery
was unfolding. So clearly we're looking to see if we can
find a similar setting, a similar type of deposit on our
property. |
| POLICY
& CONCEPT
Robert
McEwen:
I
want USGL, the largest gold exploration company
in Nevada. The new entity, a large treasury, offers
market liquidity, large land package.
However,
by remaining a junior in market capitalization
-- when it comes to discovery -- the upside potential
is meaningful.
|
|
| Q: Now you are talking of very big
numbers. |
| A: Yes. |
Q: Do any of these companies drilling
deep in Nevada create a huge value, increases the value
of U.S. Gold? You can then fold these companies perhaps
at a very advantageous price because the price of the
parent has gone up. |
| A: We will use U.S. gold as a consolidation
vehicle, yes. |
Q: A major discovery would help
because your own stock goes up very sharply, and one thing
is to issue a stock at $5 or $10 or $15. Talking of billions,
then of course it's a different ball game. You concentrated
on smaller companies because they had no money, they couldn't
do deep drilling, and they didn't have the management
capability to do things on their own. |
A: There was excitement in the area
where these companies. . . and in their stocks in 2003
when the discovery was made by Placer Dome next door.
That was the property that Barrick bought when it bought
Placer. In 2004, the gold market stalled or the gold price
stopped moving higher, and all the gold shares rolled
over and went lower. By the summer of 2005, no one was
paying attention to gold, no one was paying attention
to these junior companies. But the majors in the area
had continued their buying and had entered into joint
ventures with a number of juniors, and the juniors were
only too eager to go into these joint ventures because
their treasuries were shrinking and they weren't sure
they were going to be able to raise any capital in the
near term.
So while the market and the juniors were only too quick
to sell off their properties or their shares, the seniors
were expanding their land position at either end of the
trend, and in the middle through joint ventures with the
juniors. And that's what attracted me, that this is the
back yard of the two largest gold companies in the world.
They have all sorts of physical plants and they have excess
capacity, and they're starting to believe that what they
saw in the Carlin trend, which is where they had their
big operations could be repeating itself in this Cortez
trend. |
Q: You have been quoted a few
times about a major increase in the price of gold. Can
you comment on that? |
A: The gold price in my mind is in
an uptrend. It's moving in three steps. The first step
has already been completed, and that ran from 1999 to
the end of 2004 when the gold price went from $250 to
$440. And that was largely moving relative to the dollar.
And much of the world really wasn't excited about gold
because it wasn't going up in their currencies. So in
that period, gold was up 58% in dollar terms but up about
11% in Euro terms over a five-year period. That changed
in 2005 when the European constitution was rejected by
France and the Netherlands. And the Euro, suddenly there
was some doubt around it and the currency markets all
started reacting. There was a very positive move in gold
in all currency terms, all major currencies.
So now we've moved and the second step is really the world
audience looking at gold and saying it's moving. We don't
have a big position or we have no position in gold. It's
moving and we should get on board. That I expect to run
from 2005 to 2008, and by the end of that period it will
have tested its all-time high of $850 per ounce.
The third step is where you have a significant move in
the gold price above $850 an ounce, and that will be in
a period between 2009 and 2010, where you could see significantly
higher prices. That would be the phase that all markets
one time or another go through, where you have an exponential
run and slope on the price. So where could it go if you
were to look at the 1980 high of $850 and adjusted for
inflation? So you get today a price of around $2,200 an
ounce. |
| Gold
-- according to Robert McEwen |
| $250
- $440 |
Moving
with the dollar |
1999
- 2004 |
| $850 |
Death
of the Euro, gold in multi-currency move |
2005
- 2008 |
| $2,200 |
Gold
is monetary reality in the 21st century |
2009
- 2010 |
|
Q: I have an observation, if I may.
Assuming I really don't know how money is created internationally,
all I can say is that there's a commodity boom, a real
estate boom and the population boom in the Far East. For
instance, the other day I read that a Russian oil company,
Rostovsky, is trying to raise $20 billion in London. The
stock exchange is going public. That kind of money has
never been in investors' hands. These are big numbers,
because every day there is a similar one.
That means two things, that if there is money floating
around, the currency fluctuations will be bigger, and
that's always very bullish for gold. What is interesting
is that the silver, very small volume, with this EFT's
like gold, could go to $20 or $30. In other words, the
whole value system is going to change. The only thing
which is going to be still cheap is hamburgers at McDonald's.
|
| A: Yes. |
Q: Look, this is the 21st century.
This is a money explosion and value explosion. A hundred
years ago, in the 1920's and 1930's, there were dictators.
It's still a better period to live in than when my parents
lived. |
| A: That's right. |
Q: That's my vision of the future.
Do I see it clearly? |
| A: I agree. The gold supply can
only increase about one percent a year, and everything
else is increasing by many multiples of that. |
|
| Information
contained herein is based on data obtained from recognized
statistical services, issuers reports or communications
or other sources believed to be reliable. However, such
information has not been verified by us and we do not
make any representation to its accuracy or completeness.
Any statement non-factual in nature constitutes only
current opinions which are subject to change. BERAL
INC. or their officers, directors, analysts or employees
may have positions in the securities or commodities
referred to herein, and may as principal or agent buy
and sell such securities or commodities. An employee,
analyst, officer or a director of BERAL INC. may serve
as a director for companies mentioned in this report.
Neither the information nor any comment expressed shall
constitute an offer to sell or a solicitation of an
offer to buy any securities or commodities mentioned
herein. There may be instances when fundamental, technical
and competitive opinions may not be in concert. This
firm may from time to time perform investment banking
or other services for or which investment banking or
other businesses from any company mentioned in this
report. |
Andrew Racz
February 22, 2006
(Article
21 - posted February 22, 2006)
e-mail: mlikar@aol.com
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