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, Financial) 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 |
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.
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.
The Wellgreen project contains 7M oz platinum group metals + gold, 2B lbs. nickel, and 2B lbs. copper.
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.
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.
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.
6 Competition
Wellgreen has the potential to be the third largest PGM producer in North America.
Wellgreen is in the lower quartile of production cost on a co-product basis in the global platinum equivalent cash cost curve.
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.
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.
The next catalyst for the stock could be the resource upgrade targeted for this summer.
Disclosure: The author is long TSXV:WG
