Jeff Pontius looks forward to 2012 for Corvus Gold
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Good afternoon Hemal,
I will contact the company and discuss your concern.
Best,
Big Al
Thanks Al.
Hi Hemal,
Here is the response from the Company:
“Hi Al,
Just tried calling you but didn’t get through. Would you mind calling me back at 604-638-3247?
As for the option grant, the 650,000 options were granted to the latest addition of our team, our Chief Administrative Officer and General Counsel, who will be playing a pivotal role in our permitting efforts and is an extremely established figures in mineral and environmental law. It was approved by our compensation committee and forms part of the compensation package that was negotiated. Does this help?
Best wishes,
Shirley”
Hemal,
Please feel free to call Shirley at the number shown above.
Best,
Big Al
Big Al,
Thanks for the follow-up. I will contact Shirley directly. Happy that the options are for a new executive and not for the existing team; i.e they are not rewarding themselves for loosing >50% from the 52 week high.
Dont get me wrong, I am not singling out ITH here…..Explor resources (Tsx:EXS) had an appaling motion for the Nov-11 AGM where they were trying to get a shed load of options repriced to 30 cents (current value). Thankfully they removed that motion prior to the AGM……I suspect a couple of large shareholders might have got a tad annoyed!
If-for the CAO- future vesting of the 400k+ options is dependent on performance, i.e. moving Livengood along the permitting stage then it is palatable. I am going to review the options packages for a couple of my larger holdings……..the integrity of management can be asssessed by their behaviours at this time when stock prices are bombed out.
Best,
Hemal
Al,
I just spoke to Shirley at ITH. She explained the above and clarified that according to TSX rules the exercise price has got to be based on previous close or 5 day price, hence $4.43. This is consistent with when Jim Komadina got his options in June (priced at $8ish). ITH attract key staff with options and do not have excessive cash remuneration; the money they make will ultimately depend on the how succesful ITH is. Moreover, annual options grants are not commonplace, since a large slug of equity is given at the outset.
I appreciate you putting me in touch with Shirley…….it was a useful exercise and has put my mind at ease. ITH is my friend again (lol!)
Regards
Hemal
Hi Hemal,
Glad to be of help.
Best,
Big Al
I spent a LOT of time on this, and got the idea, but after 2 and a half hours, the math got melddud up so I messed up the plus signs and minus signs Still, I did understand this, and then of course, I remembered my friend had asked me this question before, so I googled Derangement , and I found it!So after going through multiple proofs on the internet, I saw how the first part can be generalized to 1/e, which is just kinda nifty. e pops up yet again!
Jeff Pontius is an extremely smart guy who will make his shareholders a lot of money in due course. This is my favourite junior expolrer. Having worked on Boards (of private companies) I know how much ego plays into every day decisions…..JP decided to split Corvus from ITH because he recognised his strengths-Expolration and not Development.
However Al, I have a serious gripe with ITH. I dont know if you are aware but ITH awared a senior executive 650,000 options @4.43 (announced yestreday). Wow! The stock was $10 in April, $8 in August- yes they have been battered in line with a lot of advanced juniors/developer. The thing that bugs me is the exercise price. What I read from this is Management have awarded options (of which 216000 vests immediately) at the lowest possible value as a reward for running the stock price down to a level not seen for 2 years! If the market recovers in the next month and the shares go to $6.50 (very conceivable) then the Executive makes a quick buck -or $500,000 to more precise! In my opinion this is theft of shareholders’ equity.
The above example indicates how it is in Management’s interest to have a volatile stock price so that they can fiddle cheap options from the company owners, i.e. us. I am not ranting because I got in too high (my price was $5.20). I have learnt from my previous errors and I do not chase shares that are rising, as Mr Market gives us plenty of opportunities if we are patient on the TSX PM stocks.
You have had Jim Komadina on the show a number of times previously…..I would love to hear from him why the exercise price was not $6+, which it would have been if we had taken a 180 day average.