I am proposing and lobbying to set precedent that what Opawica sold was not an equity but a type of sophisticated option. If one of these companies hits a real find and then has proven reserves of some mineral, then the option would in essence go into the money. Once a junior company has proven reserves they should be allowed to list shares and options holders to exercise them. If they sell the reserves to another company or regain the status of having no reserves in another way they should go back to being options. Call them Nadine Options. I would predict that they would be priced largely on the amount of cash they have and their burn rate. Which is completely fair and exactly what is represented by an option. Which is the right but not the obligation to purchase a set amount of stock once prices (or in this case reserves) rise above a certain level. Zero would seem to be a fair level. However, retail investors should be shown this chart before buying any option. It would give them a more true, clear and full representation of what they are buying. Companies like Opawica wouldn’t be able to raise as much, but they could still raise capital, in a way that is much more fair and true. It would remove this shadowy aspect of Canadian capital markets and provide a more transparent and seamless playing field for all parties involved most importantly the faceless retail investors who have likely been fleeced as a result and have regularly been in Canada for decades.
This situation is a result of the history of capital markets and its ability to develop new products and services to fit the needs of the economy. Options were not available as they are today, traded on electronic markets, available to retail investors, when Canadian equity markets were in their infancy. Mining companies that developed the major Canadian mineral finds needed to raise capital and stocks were the only way people knew how to do it. Options were known to investors, but that would have been limited to private, custom made deals between individuals rather than standardized contracts listed on an exchange.
Some of these companies issued stock and many of them went on to achieve great success, however the vast majority did not. As time has gone on, there are fewer and fewer major discoveries and they are made and developed by major players like Barrick Gold and Goldcorp or companies who work directly for them. I’m not saying I like it, but that’s the way it is. Companies like Opawica are so outdone that it is clear to anyone who even gives the situation passing thought that it should be a crime that they can sell stock like that and have the stock lose over 99%. I have been polite in saying this before, but clearly, it demonstrates either complete incompetence or fraud, that this stock could perform like this and the company do nothing but spend money and print stock. Had they called it an option I would not have been able to make this complaint. There would have never been any motive for anyone to conceal or commit anything with regard to Nadine Antoniazzi. I am confident that I could spend the rest of my life researching every single company that has been listed in Canada who’s stock has performed like this. That they exist at all is completely absurd and a result of Canadians’ collective ignorance and lack of fortitude.
Red Pine Explorations is connected to Opawica through Joe Dwek and it looks exactly the same. There`s no bid in that stock.
We now have markets developed enough to handle options trading. Move these companies to an options exchange or simply call them options and call the exchange an option exchange.
Compare this chart with my chart of the Dow Jones and Opawica below in my previous post if you have any doubt.
http://optionalpha.com/option-theta-definition-and-time-decay-chart-8914.html
Quite similar to Opawica wouldn’t you say?
scotthoughauthor 