Selwyn Resources – Harlan Meade is out, company will distribute cash to shareholders

See the press release filed on SEDAR.

  • Joseph Ringwald, the VP of mining, becomes the new CEO.
  • The company states that it has excess cash and intends on distributing it to shareholders.
  • It will retain some cash to cover corporate overhead and the costs of keeping the ScoZinc project on care and maintenance.

[…]the Board has determined that the optimum course of action is to effect a return of capital (“ROC”). The Board is in the final stages of determining the exact amount of the distribution; however, it is the Board’s intention to pay out as much as reasonably practical, while reserving sufficient capital to maintain the ScoZinc Project on a care and maintenance basis and cover corporate expenses.

My guess is that the company will issue a cash dividend around 6-8 cents/share and the shares will trade at 1-3 cents/share.  This will likely be followed by a reverse split of the stock.

I am long Selwyn and may sell a large portion of my position at 9 cents/share.  The current bid/ask is 8.5/9.0 cents.  If the ScoZinc project sells for several million dollars or more, then the company will be worth more than 9 cents/share.

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