At the end of September CMI seemed on the brink of bidding us the Big Bye-Bye once again.
Previously last-minute stock offerings have provided the ready cash for the company to make it through the next few months, but how could the market stand for another offering at the low price that would be required now? Wouldn’t that just advertise how far the company has fallen?
And sure enough, CMI has staggered through this latest crisis by finding Century Management, an investor willing to put up $14 million to buy 21,363,727 shares of common stock at 67 cents a share. The CMI [LODE] stock price had slipped as low as $1.02
Still, the way has been smoothed for its assets to be removed, and CMI is now prepared for collapse, whether by happenstance or design.
Indeed, a few weeks ago Corrado De Gasperis exercised a stock option which put more than $1 million in his personal pocket. The CMI-controlled Comstock Foundation for History and Culture paid $350,000 to Scott Jolcover for the Donovan Mill in Silver City. Mr. Jolcover had paid $50 or $75 thousand to Mike Donovan’s estate for it so there went more than a quarter of a million dollars into his pocket. I read that as the reward from a grateful company to its faithful servant, despite its roundabout course through the non-profit Foundation.
Is this the next-to-last scene of the Opera?
Not necessarily. What if CMI actually produced a profit in the quarter just ended? What if it made a million dollars!!?? Well, then it would be ballyhooed far and wide, and the fact that it has taken more than $200 million to get it will not be mentioned. Nor will any further erosion in the price of gold. From $1.21 CMI’s stock price fell to $1.02 last week before rebounding.
Are Winfield & Co. worried? It seems unlikely, as they have nothing to worry about. No matter what happens, they will emerge unscathed. When Barzel Industries collapsed under De Gasperis’ leadership there was plenty of outrage — the ex-employees there named him Corrupto De Gasbag — but no-one went to jail or paid a fine.
And of course it’s not over.
In his eager haste to become a modern nabob on the Comstock John V. Winfield is performing a parody of the role played by William Sharon in the 19th century. He is a clever financial architect, and he seems about to bring Phase I to a successful conclusion. I predict that when the corporate cocoon of CMI falls away, it will reveal a fiscal butterfly in the form of John V. Winfield and his friends holding all the assets acquired with shareholders’ money. William Sharon was notorious for burdening mine and mill owners with high interest loans and then foreclosing and seizing assets at the first opportunity.
When that occurs we would expect to see Phase II unroll from the corporate briefcases as Comstock Mining LLC and Northern Comstock LLC combine resources to enter the real estate development business. Expect a Western Village or something like it to transform Gold Hill from an authentic relic of the Comstock to a make-believe theme park.
How long will it take them to fail at this as well? And how long will it take John V. Winfield to be as hated as William Sharon was in his day? He seems to have a good head of steam built up already.
Storey County Commissioners Hess, Kershaw and Sjolvangen gave this bunch the green light to begin our race to the bottom. Shouldn’t their names be on a placque somewhere?
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