2013-07-15 23:33:31 -
Toronto, Ontario CANADA, July 15, 2013 /FSC/ - Jaguar Financial Corporation (JFC - TSX), ("Jaguar") today responded to Barisan Gold Corporation's ("Barisan" or the "Company") (TSXV: BG) press release announcing the re-initiation of exploration and drilling activities at Barisan's Upper Tengkereng prospect in Indonesia. Given the current weak state of the capital markets for micro-cap mining exploration companies such as Barisan, Jaguar strongly believes that Barisan's plan to drill up to 3,000 metres in the coming months is an imprudent and wasteful use of the Company's cash resources.
Operating in Indonesia is fraught with political risk over and above the general risk associated with mining exploration. Jaguar believes that Barisan's gold properties hold very limited geological potential and do not
warrant additional expenditure. The market appears to share Jaguar's view about the properties' prospects given the fact that Barisan's shares trade at a discount to its cash value. Barisan's market cap of $2.2 million represents a substantial discount to the $5 million in cash resources last reported by Barisan as at February 28, 2013, meaning that the current value of the Company is less than 50% of its last reported cash value. It is clear that no value is being attributed to Barisan's mining properties, and that the only asset on the Company's balance sheet that is being ascribed any value is its cash resources, which is why it is important that Barisan not deplete its cash any further by continuing to invest for the mining properties in which the Company receives zero value.
Canadian Imperial Bank of Commerce ("CIBC") has a 50% interest in CEF (Capital Markets) Ltd., which is Barisan's largest shareholder with approximately 22.1% of Barisan's outstanding shares. CIBC's stakeholders are poorly served by an investment in a company such as Barisan that has limited prospects and is misallocating cash. As an example, Barisan incurred $639,935 in general and administrative expenses for the six months ended February 28, 2013, including $90,735 spent on travel and accommodation, exceptionally high figures for a company of its size.
With Barisan's announcement today of additional expenditures planned on what Jaguar believes are marginal, low-grade properties, the rate of cash burn is likely to accelerate. In order to stave off the possibility of Barisan further depleting its cash resources at the expense of its shareholders, Jaguar seeks to work with Barisan's management, directors, and fellow shareholders to implement a value creative transaction to distribute all or substantially all of Barisan's cash resources to its shareholders. Jaguar and Vic Alboini, Jaguar's Chairman and Chief Executive Officer, collectively own 4,147,000 common shares, or 10.18% of the total issued and outstanding common shares of Barisan.
About Jaguar Financial Corporation
Jaguar is a Canadian merchant bank that generally invests in undervalued, overlooked and underappreciated public companies where Jaguar determines that one or more changes could be made to create shareholder value.
The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this news release. This news release may contain certain forward looking statements which involve known and unknown risks, delays, and uncertainties not under Jaguar's control which may cause actual results, performances or achievements of Jaguar to be materially different from those implied by such forward looking statements.
For additional information on this press release, please contact:
Vic Alboini, Chairman & Chief Executive Officer
Jaguar Financial Corporation
Commerce Court North
25 King Street West, Suite 1450
Toronto, Ontario M5L 1E8
To view the press release as a PDF file, please click on the following link:
Source: Jaguar Financial Corporation (TSX: JFC)
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