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Powertech Closes Vancouver Office, Cans Staff to Get Azarga Loan; Says Permits Certain

By caheidelberger on 2013.10.22

Hey, Mark Hollenbeck! Are you getting paid in yuan yet?

Powertech is so short of cash that it's sacrificing its own people and closing its headquarters for loans. The company that wants to drill the Black Hills for uranium announced yesterday that Hong Kong corporate raider Azarga is loaning them $3.6 million to keep them afloat through their regulatory fights. Powertech CFO Thomas Doyle cheerfully sends out the press release announcing what Powertech sacrifices for this cash... including his own job:

Concurrent with the closing of the Facility [the loan package], the Company will convert the Initial Debenture into Shares of the Company at CDN$0.07 per share, appoint a new director, change certain officers and proceed with closing its Vancouver office. Thomas Doyle and Greg Burnett will resign as directors and the Company will appoint Apolonius (Paul) Struijk, an Azarga nominee, as a director of the Company. Mr. Matthew O'Kane, another Azarga nominee, was previously elected as a director at the Company's recent Annual General and Special Meeting. The Company will also terminate the management agreements with Thomas Doyle and Greg Burnett. Effective upon termination of such agreements, Thomas Doyle has agreed to resign as Vice President Finance, Chief Financial Officer and Gregory Burnett has agreed to resign as Vice President Administration, Secretary. The Company will appoint Richard Clement as the Corporate Secretary and, on an interim basis, Adria Hutchison as the Chief Financial Officer.

Commenting on the new financing deal with Azarga, President and CEO Mr. Richard Clement stated, "We are very happy to strengthen even further our strategic alliance with Azarga. The provision of this financing facility provides the Company with the financial resources it requires to progress through the completion of the permitting process with confidence and clarity. In addition, the closure of the Vancouver office will reduce the operating costs of the Company and will assist us in achieving our goal of receiving the required operating permits at a lowest cost. Azarga has agreed to independently finance the corporate functions performed by the Vancouver office with no diminishment of relations with the Toronto Stock Exchange ("TSX") and shareholders" [Thomas Doyle, Powertech press release, 2013.10.21].

The release about Powertech's further surrender to Azarga includes standard Powertech propaganda about how its permits before the Nuclear Regulatory Commission and the South Dakota Department of Environment and Natural Resources are done deals:

Updating on the progress of the permitting process and hearings for the Dewey Burdock project Mr. Clement added, "The Company is making good progress in its permitting activities. The Nuclear Regulatory Commission ("NRC"), in November 2012, issued the draft Supplemental Environmental Impact Statement ("SEIS") that is to be followed by the final SEIS in November 2013. Once the final SEIS is complete, there is a 30-day public comment period, after which the operating license will be granted.

According to the NRC, the completion of the SEIS is on schedule (subject to the length of the federal government shutdown) and publication will follow sign-off by the various departments who have contributed to the development of the SEIS. During the review period by the NRC, the State of South Dakota Department of Environment and Natural Resources ("DENR") has reviewed the Company's application for state permits and has issued recommendations that the three major permits required for Dewey Burdock be granted. Hearings for these permits are underway and approvals are expected by the end of 2013 or in the first quarter of 2014. Also, the U.S. Environmental Protection Agency ("EPA") grants the final mining permits. These permits are expected to closely follow the State permits and the license that will be granted by the NRC" [Doyle/Powertech, 2013.10.21].

We've heard that our regulators may be ready to ignore the strong opposition they are hearing from the public and just vote for Powertech. But the Powertech uranium mine in the Black Hills is far from a done deal, investors. Opponents are still showing up to fight. And remember: if Powertech has to keep cannibalizing itself to get the cash to stay alive, there may not be much company left to fight.

Published in South Dakota

caheidelberger

13 Comments

  1. Deb Geelsdottir 2013.10.22

    Azarga sounds like a Romney/Bain kind of business. Grab up a company, wring everything of value from it, (including SD resources), and make a run for the nearest offshore bank. How can we trust Powertech to do any environmental protection, mitigation, or reclamation?

    This sounds like a sucker's deal, like MN and the Wilfs.They are convicted corporate criminals, and MN is making business deals with them that will enrich their offshore accounts by something more than a half billion dollars.

    Insanity on both sides of the border, and the specious arguments are very similar. 'They are really pushing these deals for the sake of the people. Think of the economic opportunities; think of the jobs; think of the taxes generated!' In fact, I don't know if there is solid, reputable proof that these economic give aways by states really are such dollar generators for any economies other than the private company.

    Just to be clear, whether the give away is in the form of tax breaks, regulations ignored, or massive buildings erected, there is a cost similarity. MN, or any state, has pages of needs for $700,000,000. What will SD un- or under-fund when things go wrong and Powertech suddenly becomes bankrupt?

    The people, the states, bear all the risks while the businesses/beggars get all the rewards.

  2. Stan Gibilisco 2013.10.22

    Hong Kong ... China ... Cities where you can't see your feet for the particulates at a milligram per cubic meter ... So they loan money to wreck Paha Sapa too ... Makes perfect sense. Perfectly horrible sense.

  3. Mark 2013.10.22

    With all the recent and misplaced talk about carpetbagging, Ms. Geelsdottir and Mr. Gibilisco seem to have a real grasp of the word and its implications.

  4. Donald Pay 2013.10.22

    Blumont Group, a Singapore-based company, is also involved, as indicated in the link below, as major investors in Azarga. At this point we don't really know who is involved in this mine. I can't understand how a regulatory board would give a permit to an entity that has so many layers hiding who and what actually controls the thing.

    http://www.blumontgroup.com/about.html

  6. Donald Pay 2013.10.22

    Boy, the whole Powertech imbroglio is starting to look more and more like part of a big scam.

    Take a look at this.

    http://www.hedgeworld.com/open_news/reuters/read_news_printable.cgi?storyid=newsml_L3N0I8253:2110217522.xml

    Blumont, it turns out, is a pretty sketchy company and may have scammed Platinum Partners. Who knows what's going on with all these people churning money and looking to hit it big. This certainly is a bigger scam than the sewage ash debacle. But, you certainly have a lot of possibilities for people who could be paying off the political elite in South Dakota.

    Hey, the people involved in this thing are used to paying off politicians. If they get a permit, I'm sure that's why.

  8. caheidelberger Post author | 2013.10.22

    Fascinating, Donald, and complicated! But I see one clear connection: your Reuters article names Alexander Molyneux, head of Azarga, as the incoming chairman of Blumont.

    Maybe this isn't as obvious as it seems, so I'll ask: Does the Water Management Board (or any other DENR quasi-judicial regulating board) have the authority to demand verification of who actually owns the company, makes the decisions, and supplies the money to run the project as a condition of the permit?

  9. Deb Geelsdottir 2013.10.22

    I wonder, are any Wilf's on the board?

  10. caheidelberger Post author | 2013.10.23

    Wilf, Wilf... for a moment, Deb, I thought your were larry sneaking naughty words into the conversation. But you mean Vikings Wilfs, the guys who are willing to defraud a guy in a wheelchair with MS. I see no sign of purple jerseys in this uranium project yet!

  11. Deb Geelsdottir 2013.10.23

    Yep Cory. That's exactly who I mean.

  12. Donald Pay 2013.10.23

    Cory, the answer to your question is that the Board has every right to understand who owns the company. The questions I would have in any hearing would be who is authorized to make any statements under oath that binds the company to anything testified to or promised. And how do we know that statements and information already presented and in the record still pertains? They ought to dismiss the hearing, and make this new entity reapply.

    Powertech has submitted information to the Board about its project and the opponents will have developed a case around that information. But all the information submitted is wrong/outdated.

    This same thing happened with the sewage ash scam. Everything in the files was bogus and they just got up and lied at the hearing. The Board never looked at the files, and they refused to even consider that everything was bogus, even though it was made pretty plain to them. If the fix is in, the truth doesn't matter.

    So, my guess is if they don't dismiss the hearing and make them reapply, then the Board has been corrupted in some way.

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