Sunday, November 12, 2017

West High Yield Resources Ltd. - WHY.v - 'Wild West' Venture

After announcing a pact to sell its main assets for US$750 million, the deal has collapsed. The buyer couldn’t come up with US$500,000.

The collapse ends a transaction that sparked a review by regulators following West High Yield’s extraordinary surge on October 5 after it announced the too good to be true deal. The cash deal to sell the magnesium 'deposit' in British Columbia to Gryphon Enterprises LLC would have been worth about 46 times West High Yield’s value the day before the announcement, making it one of the biggest mining asset sales in the world this year.

Frank Marcasco
There were multiple red flags. According to a West High Yield filing, the Toronto office of law firm Baker McKenzie represented Gryphon. Immediately following the announcement, Baker McKenzie’s global head of mining said he was unaware of the transaction. West High Yield said the law firm had been named in error and that Gryphon “has received advice” from somebody else.

The company also warned last week that its prior claim that the assets hold about 3,000 years of magnesium supply “should not be relied upon.” Meanwhile West High Yield continues to claim "the assets have significant value.”

According to promotional media reports a total of $ 10m has been spent on the property over the past decade.
And yet again we have a dodgy company with a ridiculously dated presentation, a red flag due to the critical ongoing disclosure the presentation contains.

Finally the company's Preliminary Economic Assessment (PEA) was from 2013.