SFF, Seafield Resources update.

 sff sept 7 2013sff sept 7 2013 s

Fully diluted there are approximately 250 mln. shares outstanding for this company. At the most recent stock price of 3 cents, that makes the total capitalization that the market puts on this stock  $7.5 mln. Relative to the amount of money that has been drilled away, roughly >$30 mln. , there is very little to show for all that geological activity. In the meantime the $16 mln. credit facility, not updated on the website, should by now have dwindled to a mere $6 mln. or so; pocket change for this kind of an operation that, should it want to move to a production phase, will require well in excess of $100 mln. just to get started. We would put the chances of a pleasant outcome near zero.

But the stock has done a clean a-b-c X a-b-c, double zig-zag, give or take a cent. On May 24, the company announced a re-pricing of existing employee options and the granting of an additional batch to a recently hired employee. This was approved at the board meeting on June 25th. Most options now have a strike price of 10 cents. There are about 15 mln. employee options in total (and a lot more for the credit facility!). Presently, if you are optimistic, if only briefly, you could buy the stock at 3 or, maybe, 2 cents and view it as an immediately vested, non expiring option with a premium of 3 or 2 cents. In fact you would be getting a much superior deal than the Seafield employees themselves despite the premium paid. This is evident if, for the sake of argument, the stock miraculously  rebounds to, say, 16 cents. You would gain 14 cents and the employee just 6. If the stock does not rebound you lose 2 cents and the employee his job. Which begs the question why the employees are not on the bid all the time at these levels.