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Insiders Are Buying Wellgreen Platinum

July 16, 2014 | About:
maarnio

maarnio

2 followers

1 The Company

One mining company has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

- The stock is purchased by three or more insiders within one month.

- The stock is sold by no insiders in the month of intensive purchasing.

- At least two purchasers increase their holdings by more than 10%.

Wellgreen Platinum (WGPLF) acquires and develops platinum group metals projects in Canada.

Number of shares (June 24, 2014)

93,701,281

Number of options (June 24, 2014)

7,139,618

Stock Appreciation Rights (June 24, 2014)

3,865,000

Warrants (June 24, 2014)

26,811,567

Fully diluted number of shares (June 24, 2014)

131,517,466

Share price

$0.59

Market cap

$55.3 million

Tickers

WGPLF,TSXV:WG

july-2014-wellgreen-platinum-corporate-presentation-4-638.jpg(Source: Investor presentation)

1.1 History

The company was formerly known as Prophecy Platinum and changed its name to Wellgreen Platinum in December 2013. Numerous operators have worked on the Wellgreen property since its initial discovery in 1952.

july-2014-wellgreen-platinum-corporate-presentation-35-638.jpg(Source: Investor presentation)

1.2 Projects

The company’s main project is the Wellgreen project that hosts a large PGM-Ni-Cu deposit. The project is located in the southwest of Canada’s mining-friendly Yukon Territory.

july-2014-wellgreen-platinum-corporate-presentation-3-638.jpg(Source: Investor presentation)

The Wellgreen project contains 7M oz platinum group metals + gold, 2B lbs. nickel, and 2B lbs. copper.

july-2014-wellgreen-platinum-corporate-presentation-22-638.jpg(Source: Investor presentation)

The company has also three other projects. These projects are the Shakespeare Ni-Cu-PGM project located in the Sudbury mining district of Ontario, Canada, the Fox Mountain project located approximately 50 kilometres north of Thunder Bay, and the Shining Tree project located in Fawcett Township, Ontario.

july-2014-wellgreen-platinum-corporate-presentation-32-638.jpg(Source: Investor presentation)

1.3 Business Model

Wellgreen’s vision is to develop into a significant global PGM producer. The company’s primary strategy is to continue to advance the Wellgreen project towards production.

2 Management

The CEO Greg Johnson has over 25 years of experience in the exploration and development of large scale projects in the mining industry. Greg Johnson has been CEO since November 2012. Collectively, Wellgreen’s management team has over 100 years of industry experience.

july-2014-wellgreen-platinum-corporate-presentation-5-638.jpg(Source: Investor presentation)

2.1 Insider Ownership

Wellgreen’s directors and executive officers own 6% of the company.

Here is a table of Wellgreen’s insider activity during the last 30 days.

Name

Title

Trade Date

Shares Purchased

Prospectus

Current Ownership

Increase InShares

Robert Bruggeman

VP

June 24

40,000

Yes

200,875 shares

+24.9%

Wesley Hall

Director

June 24

230,769

Yes

850,149 shares

+37.3%

Gregory Johnson

CEO

June 24

100,000

Yes

1,200,000 shares

+9.1%

Myron Manternach

Director

June 24

10,000

Yes

20,000 shares

+100%

Jeffrey Mason

CFO

June 24

100,000

Yes

2,621,500 shares

+4.0%

Samir Patel

CC

June 24

5,000

Yes

110,000 shares

+4.8%

John Sagman

COO

June 24

40,000

Yes

451,875 shares

+9.7%

Mike Sylvestre

Chairman

June 24

10,000

Yes

60,000 shares

+20.0%

There have been 535,769 shares purchased by insiders during the last 30 days. All these shares were purchased pursuant to a bought deal financing.

Here is a table of Wellgreen’s insider activity by calendar month.

Month

Insider buying / shares

Insider selling / shares

June 2014

535,769

0

May 2014

0

0

April 2014

0

0

March 2014

0

0

February 2014

0

0

January 2014

200,000

0

December 2013

1,326,700

0

November 2013

9,116,577

18,525,000

October 2013

0

0

September 2013

0

220,000

August 2013

0

427,135

July 2013

1,101,500

578,500

June 2013

602,989

0

May 2013

0

0

April 2013

0

0

March 2013

0

0

February 2013

387,500

185,000

January 2013

51,000

35,000

(Note: Warrant exercises are not included in the table. There have been 35,000 warrants exercised since January 2013.)

There have been 13,322,035 shares purchased and there have been 19,970,635 shares sold by insiders since January 2013. The last time that insiders sold shares was in November 2013.

2.2 Compensation

The CEO was paid a base salary of C$154,203 and the CFO was paid a base salary of C$54,444 for the fiscal year 2013. These salaries are very modest.

3 Financial Summary

3.1 Current Situation

Wellgreen reported the first-quarter financial results on May 30 with the following highlights:

Revenue

C$0

Net loss

C$2.2 million

Cash

C$0.6 million

Debt

C$0.1 million

Wellgreen closed a C$6.9 million financing on June 24.

3.2 Historical Developments

Here is a table of Wellgreen’s revenue and earnings since 2011.

Fiscal Year

2011 (8 months ending March 31, 2012)

2012 (12 months ending March 31, 2013)

2013 (9 months ending December 31, 2013)

Revenue (C$)

0

0

0

Net loss (C$ millions)

7.0

7.4

39.6

EPS

-0.13

-0.12

-0.53

Wellgreen’s net loss peaked in 2013 due to a C$35.4 million write off.

4 Shares

Here is a table of Wellgreen’s number of shares since 2011.

Fiscal Year

2011

2012

2013

Number of shares (millions)

53.6

63.8

74.7

Wellgreen’s number of shares have grown 39.4% since 2011.

5 Outlook

Wellgreen is expecting updated Preliminary Economic Assessment this summer.

july-2014-wellgreen-platinum-corporate-presentation-29-638.jpg(Source: Investor presentation)

6 Competition

Wellgreen has the potential to be the third largest PGM producer in North America.

july-2014-wellgreen-platinum-corporate-presentation-14-638.jpg(Source: Investor presentation)

Wellgreen is in the lower quartile of production cost on a co-product basis in the global platinum equivalent cash cost curve.

july-2014-wellgreen-platinum-corporate-presentation-25-638.jpg(Source: Investor presentation)

7 Risks

I believe the main risks with Wellgreen are negative earnings, no revenues, and the price of PGM metals. Other material risks are listed in the following slide.

july-2014-wellgreen-platinum-corporate-presentation-50-638.jpg(Source: Investor presentation)

Wellgreen is also a penny stock.

8 Conclusion

There have been eight different insiders buying Wellgreen and there have not been any insiders selling Wellgreen during the last 30 days. Four of these eight insiders increased their holdings by more than 10%

The eight insiders purchased their shares at $0.60 (C$0.65). I believe Wellgreen could be a good pick below $0.60 based on the intensive insider buying.

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The next catalyst for the stock could be the resource upgrade targeted for this summer.

july-2014-wellgreen-platinum-corporate-presentation-13-1024.jpg(Source: Investor presentation)

Disclosure: The author is long TSXV:WG

About the author:

maarnio
I have 15 years of investing experience. I have traded stocks, commodities and Forex markets.

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