lovecarats2

1/2/2012 3:17:40 PM | | 52 reads | Post #30501545

http://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=SWY&t=LIST&m=30501545&l=0&pd=0&r=0

Folks, many of you retired or like me semi-retired, the latter cause I sunk and continued to sink the bulk of my savings into SWY, I most certainly share everyone's frustration and like some are somewhat paranoid. I have over $400k on the line (please don't tell Momma!) which represents for the most part our future.

2011 has not been a great year for SWY but also for my key investments. I had 3 companies, all juniors, that I had selected based on great potential. 2 of them were taken over in 2011, sold out by Management for 10 cents on the dollar, if that. The same can happen with SWY.

Baffinland Iron Mines (BIM-T) has a world class iron ore deposit. Investors like us poured 100's of millions into drilling and pre-development activities. In fact the total spent was something like $450M. A BFS was completed. After a very weird bidding process where the white knight joined forces with the hostile bidder, the company got sold for $1.50/share giving it a market cap of roughly $450M - the same amount as we put into the ground. Oh yes, BOD & Management fully backed the buy-out! Huh? Many of us had bought in between $2 and $4. To really give you folks a perspective on how these big guys work, over 50 shareholders representing <1% of outstanding shares have "Dissented" our shares requesting "fair value". ArcelorMittal, purchaser of BIM, responded with their idea of 'fair value' as being $1.10/share! And this after they bought everyone else out at $1.50. Our shares have been cancelled and a court date is set for April 2012. Basically ArcelorMittal don't give a darn about settling for true 'fair value'. The potential good news is that Siskinds, a big law firm, have launched a Class Action suit against the purchasers, management and BOD claiming a heck of a lot of misinformation & withholding of key info. They have also included the Dissenters in the claim and are looking for something in the range of a BILLION $ PLUS interest + DAMAGES! It should be interesting...and hopefully will show these folks that the little guy won't take being skewered all the time!

The other junior I held with a moderate investment was a junior oil company based in Calgary. They raised a pile of dough a few years back at SP $8; was developing an oil field in Alberta; purchased a whack of land in Sask for $20M (never declared from who); then when oil apparently didn't flow as predicted we watched SP drop to less than a buck! In 2011 they sold off the Sask land (never mention to who or for how much) then accepted an offer of $1.35, selling the entire company, reserves & production to none other than Barrick! And this is the company that includes Barrick Gold, the world's largest gold producer! Barrick Energy is their private company that is responsible for acquiring oil production equivalent to what their mines use so that they are fully hedged on oil! Obviously they knew something about production potential that shareholders didn't.

The bottom line of these two stories is that Management and BOD fully supported these takeovers at bottom-feeder prices. We have to ask "Why?" Seems to me that there must be "incentives" provided to Mgmt & BOD to agree to these sales. Is there a huge loophole available to these companies?

SWY may be somewhat different what with Quebec gov't, Agnico Eagle and Rio Tinto holding pretty well 50% of stock. Mind you, as long as gov't gets their royalties, employment and taxes they will be happy. Rio Tinto will likely get the diamonds to sell so they'll be happy. As for Agnico, after their $250M write-off of one of their mines in 2011 and the ugly performance of their NWT mine, they may be inclined to simply get their money back or may agree to mine at contract prices! Fact of the matter is that SWY's future is not under the control of Matt, the BOD, or retail shareholders. The BIG 3 will decide, and soon, what our future is.

I believe I will be LUCKY to walk away with only a $250k loss.

Mind you, there is always the possibility that Siskinds would just LOVE to have us as clients!

GLTA & hopefully we will see much good news and SP appreciation, but I'm not banking on it.