Montanore project will end in bankruptcy

Letter to the Editor:

My Mines Management Inc. stock, which I bought at $7.07, is now worth 18.5 cents. Glenn Dobbs and his son reaped millions.

The company is going bankrupt and stands to be delisted at year’s end. There are no funds to develop Montanore. Equipment needed to do exploration and mining has been sold.

Take note of the company’s current finances and simple math based on SEC reports (see MMI’s website): 

The market cap at 18.5 cents is $5.55 million, the convertible debt is $4.0 million (“ratchet down” conversion, with Martin Schlaff having first rights), the cash at year end  will be $1.0 million or less, saleable assets are $0, since they just sold them all, and the anticipated 2016 cash burn is $6.0 million.

With no revenue and a project going nowhere, this will end in bankruptcy. Debt holder Schlaff will be lucky to sell the project and get his $4 million back. I’m sure management are still paying themselves well and trying to work out how to cash in their employment contracts.

Meanwhile, shareholders will get zero. So, at pennies on the dollar, stockholders might as well get out while they still can.

MMI might string it out into early next year, but what good is that to everyone? With the collapse of silver and copper prices, the mine is apparently no longer viable. Dobbs might have another million or two worth of stuff to sell so bankruptcy might take a little longer. 

In my opinion, what good would all this be to the good citizens of Lincoln and Sanders county? This company has never been about shareholders or local residents, or processing ore. It was always about “maximizing insider payouts” as Glenn M. Dobbs and company, wearing his cowboy hat and trying to fool Montana people into believing he is “one of them,” was grinning all the way to the bank.

Frank Wall,

Athol, Idaho