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Powertech May Run out of Cash Before Permit Hearings End

Here's why Mark Hollenbeck's really cheesed about the delay in the Water Management Board's hearing of his company's water permit: his company might run out of money before the board rules!

In response to a severe cash crunch, Powertech Uranium Corp. on August 1 announced several transactions that raise much-needed working capital and transfer control of the troubled Centennial project to a Hong Kong based investment firm with no uranium mining experience. The firm, Azarga Resources Limited, becomes Powertech's largest shareholder and will advise the Canadian company's managers. The deals provide Powertech with enough cash to survive through November or perhaps December, based on the company's recent cash burn rate [Jim Woodward, "Powertech sells 60% of Centennial project to Hong Kong investment firm; inexperienced Chinese company becomes largest Powertech shareholder," Powertech Exposed, 2013.10.13].

Woodward updates Azarga's takeover of Powertech with details about the deal (you want desperate? Powertech pays Azarga 15% interest even if it pays off the debt) and Azarga CEO Alexander Molyneux's connection to mine financier and polluter Robert "Toxic Bob" Friedland, questionable Azarga investments in Kyrgyzstan... whew! If Powertech does get its permits, it's hard to say who will be calling the shots at the Dewey-Burdock uranium mine, Canada or China.

7 Comments

  1. Nick Nemec 2013.10.17

    This deal is sounding more and more like some sort of financial scam. Maybe someone with more time than I have can sort it out.

  2. Donald Pay 2013.10.17

    Well, here's the thing. It's not just dirty capitalist money. Azarga's Molyneux has contacts deep into the Chinese state owned enterprises that control mining, nuclear and financial matters in China. Azarga could be laundering money from these Chinese state-owned enterprises or from the Chinese Communist oligarchs who run them. They have now got Powertech hooked on very expensive credit, and they've robbed Powertech of almost all of its assets. So, Powertech is a very much like the exoskeleton that an insect is about to shed. Azarga is pretty much in control. They're letting the good ole boys pretend they are in charge for now in case they somehow get the South Dakota rubes on the various boards to get them started down the permit path. But Powertech ain't gonna mine anything. It might be the exoskeleton, but the Chinese are in control.

  3. caheidelberger Post author | 2013.10.17

    So Donald, should we ignore any assurances Powertech gives the WMB and BME about safety and responsibility in its operations, since Powertech won't be the outfit running the mine if it is approved?

  4. Rorschach 2013.10.17

    Ever since that gold out of poop ash scheme fell through leaving us with tons of worthless poop ash I've been telling myself that what we really need is some foreign company to come to SD and start digging out nuclear material. Then they can bring in more poop ash to fill up the uranium holes. It's economic development twice over!

  5. Les 2013.10.17

    It's no secret that China is waist deep in Canadian oil ownership. They just leveraged into a better position due to the inept operatives in charge of financial and regulatory at Powertech. Powertech lobbyist lying to our legis on running SB158 in the current year session which will change in 14.
    .
    If its not bad enough that the Black Hills underground water moves as in rivers causing pollution to travel at feet per hour, allowing the Chinese or anyone to control our water through use or pollution for generations to come is outright lunacy.

  6. Roger Cornelius 2013.10.17

    If Powertech should run out of money, they can borrow Kristi's government to bail them out.

  7. Donald Pay 2013.10.17

    Cory,

    I'd say if you wrote those promises in pee on the snow of the last Dakota blizzard, it would just about as long.

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