My friends at PowertechExposed.com are going to have to change their name. Hong Kong-based but British Virgin Islands-incorporated Azarga Resources is finalizing its takeover of the Canadian Powertech, the company that wants conduct in-situ leach mining for uranium in the southern Black Hills. Powertech will take on the new name Azarga Uranium Corp.

Technically, Powertech is acquiring Azarga. However, as Mark Watson and Adam Hurlburt reported on July 3, the deal looks much more like Azarga taking over Powertech. The structure of the deal is the typical dizzying shuffle of shares, debt, and tricky tax games. Jim Woodward reports that on June 30, Powertech shareholders voted to dilute their own ownership by issuing a big gob of new stocks that will make Australian businessmen Alex Molyneux and Curtis Church, and Singaporean investment firms Blumont Group Ltd. and Pacific Advisers Pte Ltd. the controlling shareholders. Molyneux is a key advisor to Blumont, which owns another British Virgin Islands company called Powerlite Ventures Limited, which holds the note on a loan of up to $26 million to Azarga, which debt Powertech/AUC now takes over via share conversion, which could make Powerlite/Blumont the majority stakeholder...

...which is all more than you may need to know if all you're worried about is stopping Powertech, Azarga, or anyone else from wrecking the Black Hills water supply, but which Powertech's shareholders and Canadian securities regulators might have wanted to know sooner:

When added to the 41 million Powertech/AUC shares already owned by Powerlite following the closing, Powerlite/Blumont could end up with a controlling stake of 51.7%. This possibility was not fully disclosed by Powertech in its May 13 meeting notice and information circular filed with Canadian securities regulators. This document is the primary source of information on the proposed transaction, and it is not clear why this potential change of control was not adequately disclosed [Jim Woodward, "Powertech Shareholders Approve Reverse Takeover by Australian and Singaporean Investors," PowertechExposed.com, 2014.07.20].

Powertech left out other information:

The Powertech information circular also does not discuss a current wide-ranging and unprecedented investigation of Blumont by Singapore’s white-collar police unit and central bank following a 95% drop in Blumont’s stock price in October 2013. Singapore police have requested three and a half years’ of corporate electronic data from the firm, as well as data storage devices belonging to Executive Director James Hong and Executive Chairman Neo Kim Hock in their probe of possible breaches of the Singapore Securities and Futures Act.

Also missing from the Powertech filing is any mention of Alex Molyneux’s role as a consultant and key advisor to Blumont’s board of directors, or his 2013 agreement, rescinded in April, to purchase 135 million shares of Blumont and become its Chairman [Woodward, 2014.07.20].

Rapid City businessman John Tsitrian has raised questions about Powertech/Azarga's exaggerations and omissions in statements to investors and securities regulators. This month's high-financial action makes Tsitrian all the more suspicious of this shaky deal and the shady characters casting their beady eyes on the Black Hills.

Perhaps the Nuclear Regulatory Commission, which takes public comment on the Powertech mining permit request August 18 in Hot Springs and holds an evidentiary hearing August 19–21 in Rapid City, should also be suspicious. Neither Powertech nor Azarga has ever received a permit to mine uranium. Molyneux is promoting a different mining technology called ablation. Adam Hurlburt raised the question last November of whether this change in ownership warrants a restart of the entire regulatory process:

It seems there’s a very real possibility the entity that drafted and submitted lengthy environmental reports, technical reports, economic impact reports, permit applications and more to the South Dakota Department of Environment and Natural Resources, the Environmental Protection Agency, and the Nuclear Regulatory Commission; the same entity that signed agreements with numerous private South Dakota landowners; the same entity that conducted several years of extensive research into the economic viability and safety of a proposed 17,800 acre in situ recovery mine set to pull roughly 8.4 million pounds of uranium out of the southern Black Hills over a nine year period; the same entity that’s assured the state of South Dakota and its citizens that it can do this successfully without adverse affects on the environment and its inhabitants may not be the same entity that actually does the mining, should all these permits be granted [Adam Hurlburt, "Who Are We Permitting?" Black Hills Pioneer, 2013.11.05].

Powertech assures us that the new owners will be bound by the same conditions set for Powertech by any previous permits. Woodward reports that a source says NRC staff aren't going to fret over the change in Powertech/Azarga control, even though no one at Azarga has experience with in-situ leach uranium mining.

Azarga appears not to know the specific mining activity for which it's seeking a permit, and its new property Powertech isn't doing a good job of informing investors and regulators of what's coming down the corporate pike. Those are two good reasons to be suspicious of the uranium mining these schemers are trying to bring to the Black Hills.

2 comments

KELO notes Google's claim that the search giant helped generate $55.6 million in economic activity in South Dakota in 2013. According to Google's nationwide economic report, that's the third-lowest amount of Googly economic activity, behind only Alaska and North Dakota.

A low raw-dollar figure is to be expected, since we have the fifth-lowest state population. But compare the per-capita economic impact Google has in our region:

  Google EconActiv (millions) Biz/Orgs using Google Ads population (2013) Google EconActiv per capita
SD $55.6 2,300 844,877 $65.81
MN $1,900.0 24,000 5,420,380 $350.53
IA $147.0 8,900 3,090,416 $47.57
ND $52.7 1,600 723,393 $72.85
MT $64.0 4,000 1,015,165 $63.04
NE $1,400.0 6,000 1,868,516 $749.26
WY $70.2 1,800 582,658 $120.48

Google stirred up $65.81 in economic activity per South Dakotan in 2013. Google thus rang the relative till harder here than in Iowa or Montana. But in Wyoming, Google generated almost twice as much business per person. In Minnesota, there was over five times as much Google economic juice per person, and in Nebraska, over eleven times.

The national per-capita figure for Google economic activity was $353.65. Here's a list of all states (plus DC) with population and Google economic impact per capita:

Rank State population (2013) Google Econ/Activ Google Econ/Activ per capita
1 District of Columbia 646,449 882 $1,392.43
 2 New York 19,651,127 18300 $934.81
3 Massachusetts 6,692,824 5800 $872.80
4 Vermont 626,630 522 $833.93
5 Nebraska 1,868,516 1400 $754.57
6 California 38,332,521 25400 $668.42
7 Illinois 12,882,135 8100 $629.46
8 Utah 2,900,872 1760 $616.49
9 Washington 6,971,406 4200 $609.11
10 Nevada 2,790,136 1280 $464.72
11 Connecticut 3,596,080 1520 $423.19
12 Minnesota 5,420,380 1900 $353.18
13 Colorado 5,268,367 1800 $346.86
14 Florida 19,552,860 6500 $336.43
15 Arizona 6,626,624 2100 $320.55
16 Delaware 925,749 283 $308.60
17 New Jersey 8,899,339 2200 $248.09
18 Georgia 9,992,167 2400 $242.04
19 Pennsylvania 12,773,801 2800 $219.36
20 Maine 1,328,302 286 $215.28
21 Texas 26,448,193 5600 $214.88
 22 Kansas 2,893,957 611 $211.76
23 Virginia 8,260,405 1700 $207.66
24 Maryland 5,928,814 1200 $203.91
25 Oregon 3,930,065 780 $200.01
26 Missouri 6,044,171 1200 $199.19
27 Michigan 9,895,622 1700 $172.02
28 Rhode Island 1,051,511 173 $164.71
29 New Hampshire 1,323,459 206 $155.87
30 Ohio 11,570,808 1800 $155.80
31 Wisconsin 5,742,713 862 $150.58
 32 South Carolina 4,774,839 650 $137.61
 33 Tennessee 6,495,978 815 $126.26
34 Wyoming 582,658 70.2 $121.74
35 Indiana 6,570,902 762 $116.55
36 North Carolina 9,848,060 1100 $112.84
37 Idaho 1,612,136 164 $102.78
38 West Virginia 1,854,304 174 $93.72
39 North Dakota 723,393 52.7 $75.14
40 Arkansas 2,959,373 201 $68.14
41 South Dakota 844,877 55.6 $66.66
42 Montana 1,015,165 64 $63.65
43 Hawaii 1,404,054 82.3 $59.20
44 Kentucky 4,395,295 255 $58.22
45 Oklahoma 3,850,568 199 $52.15
46 Iowa 3,090,416 147 $47.80
47 Alabama 4,833,722 203 $42.14
48 Alaska 735,132 27.3 $37.38
49 Louisiana 4,625,470 170 $36.94
50 New Mexico 2,085,287 75.5 $36.24
 51 Mississippi 2,991,207 60.2 $20.16

Notice that the top ten are an interesting mix of urban centers and rural places, while the bottom ten have are more uniformly large, rural states. If we take Google economic impact as a sign of overall online economic activity, these data suggest that rural states can exploit online tools (not just search, but online ads, YouTube, and analytics) to generate revenue as effectively as urban places like New York and Massachusetts.

These numbers may also suggest something about interstate trade. It is possible that the states with lower Google economic impact per capita have more insular markets, with more businesses relying on local sales and word of mouth. I am really curious, though, what difference has Nebraskans spending so much more time and money on Google tools than we South Dakotans next door.

14 comments

The Displaced Plainsman features another economic scorecard that doesn't fit Governor Dennis Daugaard's portrayal of South Dakota as a great place to do business... or maybe it does. Mr. Kallis finds this list of the ten best states in which to make a living, a list that South Dakota does not make:

South Dakota wasn't first on this list. That honor went to Washington state. South Dakota didn't make the top 10. Neighboring Minnesota ranked 3rd, North Dakota 7th, and Nebraska 10th. Scrolling down the list, two of our other neighbors were in the top twenty: Iowa ranked 15th and Wyoming 17th. Montana made it into the top 50 half of states coming in at 22.

South Dakota didn't make the top half. When it comes to earning a living, South Dakota is the best of the worst, coming in 26th. I'm not a marketing guru, but I doubt most people respond well to invitations to be "art of the best of the worst". Further, "Come Work in South Dakota; Earning a Living Here Is Only Slight More Difficult Than It Is In Montana" doesn't have much of a ring to it and it doesn't fit on a bumper sticker [Leo Kallis, "South Dakota Worst State In Region To Earn A Living," The Displaced Plainsman, 2014.06.24].

If Governor Daugaard is hanging around the Mall of America trying to convince regular working Minnesotans to move here, those stats won't help much. If he's trying to recruit CEOs who want squeeze labor for greater profits while they keep their villas in Wayzata, knowing that their labor market competitors in South Dakota aren't pouring on the wages could be a cynical plus.

But South Dakota already has among the the lowest unemployment rate in the country. New companies moving in need to bring more workers into the state. So even those profiteering CEOs have an interest in being able to turn to applicants from Minneapolis, Fargo, and Lincoln and to say, "Yes! Moving to our new factory in Mitchell will be a step up for you and your family." The stats Mr. Kallis shows us challenge business leaders and the Governor alike to make that claim with a straight face.

Update 12:03 CDT: That didn't last long: CNBC has taken away South Dakota's "Best State for Business" ranking after just one year. In the newest rankings, South Dakota falls from #1 to #11. Minnesota ranks #6, a fact about which Minnesota is entitled to razz us mercilessly... or at least ask that we remove our big #1 banner from the Minneapolis airport.

20 comments

Our friends from Billings gaze lovingly on Sioux Falls and conclude that the Minnesota-esque policies of adding a tax and building infrastructure are good for economic development. But even if you think South Dakota's low-taxes philosophy still gives us an advantage over Minnesota, we still can't compete with Ireland. Rather than uproot, Medtronic is staying in the beautiful Twin Cities, paying $42.9 billion to acquire Irish surgical-device maker Covidien, and simply moving its headquarters on paper to Dublin to get a lower corporate income tax rate.

But wait: the boss says taxes aren't the prime mover here:

While the deal will allow Medtronic to reduce its overall global tax burden, the Minneapolis-based company said it was driven by a complementary strategy with Covidien on medical technology rather than tax considerations

"The real purpose of this, in the end, is strategic, both in the intermediate term and the long term," Medtronic Chief Executive Omar Ishrak said in an interview after the deal was announced. "It is good for the U.S. in that we will make more investment in U.S. technologies, which previously we could not."

Medtronic's corporate tax rate, now at around 18 percent, won't change much, Ishrak said [Susan Kelly and Greg Roumeliotis, "Medtronic to Buy Covidien for $42.9 Billion, Rebase in Ireland," Reuters, 2014.06.16].

Maybe Medtronic's CEO is just trying to downplay the the unpatriotic business of trying to dodge taxes. But he and his 8,000 employees will stay in Minnesota and keep paying Minnesota state income taxes, as will the 1,000 new workers Ishrak says Medtronic will add in the next five years.

9 comments

In a press conference this morning, reporters asked illegitimate U.S. Senate candidate Annette Bosworth about allegations that she has failed to pay employees of her clinic and her campaign the wages she promised them. Bosworth did not deny that she has shorted her workers paychecks. Instead, she accused her staff of not meeting "performance measures":

She didn't respond directly to the question, but obliquely criticized the former employees.

"There are performance measures that are met on my team," Bosworth said. "When you're not holding up your responsibilities on the team, there is a trend that says they won't stay long" [David Montgomery, "Bosworth Slams Critics on Food Stamps, Employee Pay," Political Smokeout, 2014.05.13].

So to clarify, Annette, you're saying you did pay employees less than what you promised because they didn't work up to your expectations?

...When asked Tuesday whether she was saying former employees hadn't been paid their wages because they hadn't been doing their jobs, Bosworth rephrased her original statement about "performance measures" and added that "everyone on my team has had sacrifices."

"That's enough questions on that," Bosworth concluded [Montgomery, 2014.05.13].

Enough questions? No no no no no. Nurse practitioner LeAnn Batiz came forward last week with the $80K/year contract Bosworth promised her and the Bosworth pay stubs showing she ended up having to go on food stamps to feed her family. Batiz didn't have any trouble meeting performance measures. Bosworth said so herself in her November 15, 2013 recommendation letter for Batiz:

Annette Bosworth, recommendation letter for LeAnn Batiz, November 15, 2013

Annette Bosworth, recommendation letter for LeAnn Batiz, November 15, 2013 (click to embiggen)

I found Ms. Batiz to be an outstanding nurse practitioner, who was highly motivated, intelligent, hardworking, and meticulous. Patients and coworkers and physicians thought highly of her professionalism, genuine sincereity, and concern....

Ms. Batiz was extremely proficient in our EMR system and spent hours helping to reprogram the system to benefit the staff and patients....

Ms. Batiz is leaving my clinic... in excellent standing and was not the subject of adverse actions whatsoever.... I recommend Ms. Batiz without any reservation and with the highest regard [Annette Bosworth, recommendation letter for LeAnn Batiz, November 15, 2013].

Sure sounds to me as if Batiz was meeting performance measures. So tell us again, Annette: why didn't you pay her what you promised her?

36 comments

The Board of Regents approved Dakota State University's request to offer to new graduate degrees: a Doctor of Science in Cyber Security and a Master of Science in Analytics. The latter is paired with a new M.S. in Data Science at SDSU.

The positive read of these degrees is that the Regents are responding widely to market demand and offering students skills to make beaucoup bucks. The negative read is that the Regents are aligning our university system more closely with the police-corporate surveillance state, promoting the use of Big Data to expand the knowledge and control businesses and government can gain over citizens.

While the new degrees will open some doors for students, the master's in analytics will close some other doors. UNL Department of Management Chair David L. Olson, acting as an external consultant for the Regents on this degree proposal, says DSU's faculty are already busting their chops, and adding this program will require easing up elsewhere. Who takes the hit? Students aiming for academia:

The DSU faculty is heavily involved with a large doctoral program, which frankly includes a far greater student-to-faculty ratio than is normal. This program seems to be quite successful in providing doctoral graduates for business and industry. However, possibly they should consider reducing the number of doctoral students targeting the academic market. The DSU faculty involved are all competent and dedicated and merit congratulations on their accomplishments, but this program adds a minor amount of work to a very stretched faculty. If they reduced Ph.D. admissions on the academic side of their doctoral program, that should more than compensate for the additional burden that might arise from the proposed program.

...The primary weakness I perceive is that faculty may have too much assigned responsibilities at DSU. I think this would be alleviated by reducing the Ph.D. admissions to focus on students in business and industry [David L. Olson, letter to South Dakota Board of Regents, 2014.03.19, Attachment III, Board Agenda Item 26-2(a), 2014.04.02, p. 29].

DSU has signaled its preference for producing practitioners over professors with its choice to offer the D.Sc. instead of the Ph.D. Olson's recommendation further clarifies what DSU's graduate program is and what it isn't. This new master's degree is for people who want to make big money working for the corporate-informational complex. If you're interested in knowledge for knowledge's sake, and if you just want to expand and share that knowledge, you'll need to apply elsewhere, because DSU won't have time for you.

2 comments

(In today's Freudian slip, I first type White Oaf.)

White Oak Global Advisors from San Francisco announced yesterday that it finalized its acquisition of Northern Beef Packers in Aberdeen. White Oak's press release (text below, as prepared by Sioux Falls ad firm Fresh Produce) is more about saying nothing than explaining anything. The previously publicized purchase price is $44.3 million, but White Oak is really spending only $4.8 million in cash; the remainder is White Oak cashing in chips it previously put on NBP's table to keep the state-backed money-mashing machine creaking along into its bankruptcy last summer.

Remember, Northern Beef Packers made $80 million in EB-5 investment and $152 million in total investment capital disappear in its five years of construction and nine months of abortive operation. White Oak—or, more accurately, the newest shell corporation to be tangled into Northern Beef Packers, New Angus LLC, which as of this morning does not appear in South Dakota's corporate database—is acquiring this asset for a bit more than three cents on the dollar in new money.

David Montgomery reports that White Oak/New Angus may have trouble recouping even that meager investment:

Cattle industry expert Steve Kay, publisher of Cattle Buyers Weekly, was doubtful. With the U.S. cattle market declining and a half-dozen competing meat-packing plants already open in the region, Kay said there’s not room for another packer.

“It’s tough for me to see that White Oak’s new operators can possibly compete against six other packers, all competing for the same shrinking supply of cattle in the region,” Kay said. “The new owners, I don’t know how well they know how the beef industry actually works. I wish them the very best, but they will need more than luck” [David Montgomery, "Investment Firm Completes Purchase of Beef Plant," that Sioux Falls paper, 2014.04.01].

Here's the White Oak press release, which is all board-room bluster and the obligatory "move forward" but mostly a pointedly explicit refusal to say anything specific:

New ownership for Northern Beef Packers presents new opportunity

Sioux Falls, SD – White Oak Global Advisors, LLC (“White Oak”) is pleased to announce the purchase of the operating assets of Northern Beef Packers Limited Partnership (“Northern Beef Packers”). The beef packing plant and associated assets (the “Facility”) were purchased free and clear of past liabilities and obligations by New Angus, LLC, a new entity established by White Oak.

The purchase removes the Facility from the Chapter 11 bankruptcy proceeding of Northern Beef Packers, providing the plant an opportunity to move forward unimpeded by its previous financial obstacles.

White Oak is currently evaluating its strategic options and remains confident in the Facility’s future as an operating plant. The Facility has the potential to be a success for both the community and its stakeholders. White Oak views the purchase as an investment in both South Dakota and its surrounding
communities.

White Oak will not be available for comment at this time, but looks forward to providing additional information as time and circumstance allow [White Oak Global Advisors, press release, 2014.04.01].

10 comments

Oh, how many times have I been biking up Spearfish Canyon or down the Mickelson Trail and thinking, "I could really use some pizza." But wait, what's that smoking down the highway? It's Spearfish's Mark Friedel coming to refuel me with his mobile pizza oven. Mobile pizza brick oven:

Brick ovens have been used in cooking for centuries, but Friedel had his oven custom-made by an individual in Boulder, Colo. The mobile oven includes a prep table in the back, a hand washing station, an awning, and service tables up front [Kaylee Tschetter, "Mobile Pizza Oven to Cruise Spearfish," Black Hills Pioneer, 2014.03.25].

A brick oven on a trailer, cooking pizza in two to three minutes. That's Reason #547 to live in the Black Hills.

Alas, Friedel won't be frisbee-ing pizza to riders on the go. But come May, he will be setting up Black Hills Pizza once a week in the Crow Peak Brewery parking lot, once a week out somewhere on the east side of Spearfish, and then hit local events around the Hills. He also plans to hire out to weddings, reunions, and other events. I don't know how many pizzas the oven can make at once, but I'll get in line for a Noah's Ark.

Now if Friedel can add flammeküche to the menu for Alsatian ex-pats and his large local Francophone population, he'll corner the Black Hills pizza market! Whoo-hoo, pizza!

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