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Topic: Move to Chicago (Read 187 times) previous topic - next topic

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  • edmund 
  • [*][*][*]
Move to Chicago
Wheeler was a shoot from hip kind of CEO and it was his failed attempt at Wheaton River ,his purchase of New Zealand mine,his foray into Bolivia and Argentina.Rochestor was winding down,martha was near end of life,Bartolome just built ,Palmarejo art mid build,Kensington trapped in Supreme court and credit crisis and 10.00 silver had Coeur with 600,million shares .losing money and a unfinished mine. then the Franco deal and that dead weight royalty.Coeur finished Palmarejo did a reverse split,won in Supreme Court and quickly built Kensington and were looking ar end of life Martha and Rochestor.
Krebs took over as CEO and sadly organized company after three builds.Shortly after he took over there was the screwup ofmassive proportions not paying land taxes on rochestor which Krebs planned on reviving.
This screwup was just the impetus that Krebs needed to dismantle the good old boy network.
To rapidly accomplish this necessitated a corporate move out of coeur d'alene where the company was firmly entrenched-therefore a name change and move to Chicago making a complete makeover from mine managers up easier.A complete corporate infrastructure overhaul  using hi tech labor pool in Chicago
.Chicago was familar territory ,a hub of transportation and center of banking.
Krebs finished Kensington by shutting it down ,Krebs rescued Rochestor with Hanagarnes help and new mine manager.Krebs used the non payment of taxes as the trigger to turn the company around ,the move to help shed employees groomed in Wheelers system and an atmoshere in Coeur d Alene that was not going forward fast enough.

Coeur is now a modernized and organized company with focus on efficiency and recoveries-they embrace a organized goal oriented workforce embracing and comfortable with technology and innovation.
Why Chicago not Denver or Dallas -transportation hub,tax breaks,labor pool, Krebs interned there in,banking and his wife and family from Chicago
Krebs is a Wharton business school grad and Harvard MBA and familar with banking and investment community.He has the buisness training to run a major corporation,to move in money and power circles and he was young taking over.
Krebs had 20 years experience in mining buisness and i believe Krebs/Hanagarne make a formidable team .Krebs rescuing of Rochestor from being sold off by Wheeler and rescuing Palmarejo with an acquisition and re negotiating Franco royalty and ending minimum payment of 50,000 gold ozs that gives coeur the flexability to raise non royalty ore production when necessary.The shedding of Bolivia asset and purchase of Silvertip are starting now to make this his company.
I also believe that the murder of mining minister by unions forced a crackdown in Potosi and ended several contracts and that is why third party ore stopped -the drought a Red Herring--And Bolivian mill would have had to quote Krebs "third party ore as far as the eye could see".
Coeur with sale will end all reclamation fees 18 million or so,recover its Vat and cash left and retain a "2 NSR on mill.
Now some crticize Krebs for Preciosa purchase but at the time silver was 30.00 and this was one of largest primary silver mines in world and about to go to First Majestic-in a way it had to be bought or it was gone.100million in cash and the rest high priced shares -this is a 10million oz producer--so three take aways to me was Krebs experience-he secured a skilled mine builder Pan Americans best who was familat with this project from orko JV- Krebs raised capital ahead of build and had the courage to halt the project.The money raised helped Coeur survive the bear market while initiating thee expansions
Preciosa is still halted even with its last round of infill drilling and reconfiguration which raised grades 22% and halved strip ratio.
The pressure to build with Bolivia ending was releaved by purchase of Silvertip which was aided by the debt restructuring over the past year .So from low grade bulk tonnage from inherited mines Krebs and Hanagarne have halved AISC  by going underground for grade ,adding grade through exploration with existing infrastructure,using innovations and new processes to raise recoveries-  all in a big bad bear market.
This was a long ,costly process and shouldn't be minimized but applauded-this involved every day more than 2,000 employees  and maybe a billion dollars.And we folk behind our computers can't imagine the complexity of legal,organization infrastructure,accounting,G&A,engineering inventory control-you can not blink your eyes and find grade,it takes three years permitting just to build a leach pad, in quick Nevada.
My patience has never waivered on a core position bought in 2009 but my trading has adjusted considerably

Re: Move to Chicago
Reply #1
"Why Chicago not Denver or Dallas -transportation hub,tax breaks,labor pool, Krebs interned there in,banking and his wife and family from Chicago
Krebs is a Wharton business school grad and Harvard MBA and familar with banking and investment community.He has the buisness training to run a major corporation,to move in money and power circles and he was young taking over."

I was aware of some of the history you present, but within the total is no economic rationalization for a move to Chicago. Chicago is an infested crime center with local crime of rape, murder and the like at the street level to bribery, extortion, maddening regulation and over taxation to pay for crooked politicians and their legacy commitments that will never be paid. Then move to the state level where it might be worse if possible. All this was festering long before the move. Transportation center is available at Spokane, capital of the inland empire. Labor pool is not a reason to move for a company the size of CDE. Money center, no way, money will be made available where needed a reasonable return with commensurate risk provided the lender anywhere on the globe. tax breaks for labor, you will have to explain how that works for me. Family and old friends in Chicago, now that is probably the entire reason and it is not in the shareholder's interest.

Sorry Edmund, a front office move might have been necessary but Chicago was not the location, further evidenced by Chicago being the city with the highest exit rate of companies and individuals in the nation. Chicago is not business friendly.

  • edmund 
  • [*][*][*]
Re: Move to Chicago
Reply #2
Krebs picked Chicago vs Denver and Dallas the Board agreed to please its CEO-why do you think he moved it to Chicago-in the end it was because he could.

  • Nikko
  • [*][*][*][*][*]
Re: Move to Chicago
Reply #3
edmund...this is an honest question...do u get payed by CDE? Its as if you know too much, and everything is always rosy.

Re: Move to Chicago
Reply #4
Krebs picked Chicago vs Denver and Dallas the Board agreed to please its CEO-why do you think he moved it to Chicago-in the end it was because he could.

That does not say much for the board, they are there to give direction of the business and assure good business decisions are made.

  • edmund 
  • [*][*][*]
Re: Move to Chicago
Reply #5
It was a tossup between Dallas,Denver and Chicago they wanted the CEO happy.And the transformation of Coeur took teamwork and co ordination..Chicago where Coeur is located is an excellent address-Chicago is like any city good parts bad parts.
SO how do you think this was shareholder unfriendly.

Re: Move to Chicago
Reply #6
I believe it to be shareholder unfriendly for the same reasons management of other companies think it is unfriendly, mainly taxes and regulations. There have been several interviews of company's' executives that have moved from Chicago to states like Tennessee and Texas where the tax burden has dropped significantly, their employees are better off because their tax burden is lower and their cost of living lower and commute times less. Dallas by the way is not one of those better places to relocate due to long commutes and increasing tax burdens to fund legacy liabilities, primarily public union retirements.

Several years ago Illinois tried and failed to implement what was called unitary taxation, basically taxing all corporate income no matter where earned. With their ridiculous financial situation and particularly in Chicago, public infrastructure like road bridges rail commuter train systems are in many cases approaching 100 years of age. There is no provision to address that issue. Schools are near the worst in the nation wrt learning results and infrastructure; look for more taxes for that mess. It is a sanctuary city that is inviting the worst of the illegal immigrants and the police force cannot maintain street safety now as the murder rate and other crimes are very high, enough that the federal government considered 'helping out'. There are a host of other examples, but the bottom line is one has to expect to get sheared via taxation, regulation and providing for one's basic safety moving to Chicago. A company subjecting itself and employees to that mess is a cost to share holders in productivity, and direct cost.

I have had a very negative attitude with regard to the corporate move for a long time as I believe it was a management blunder. Given the reason for the move is to satisfy management's family desires, they would never agree, even if a detailed economic analysis showed it to be a poor decision. That said, I believe the management team has done very well overall and I hold a sizable stake in the company that I expect to yield handsome profits over the next several years.

  • edmund 
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Re: Move to Chicago
Reply #7
I have never spent any time looking into the situations that you have brought up.Its a moot point at this time.I have no reason to doubt what your posting and my only connection to Chicago is sports oriented and have a nephew who is head of development for a fund and lives with his family there and loves it.
I will read up on Coeurs Tax incentives and some write ups as to quality of life in Chicago-but i'm a city kid from Boston now residing in England near Welsh border.But i love Boston miss it every day i used to commute so i know how much time is spent in airports and how important connections are.
Look at what Coeur values safety,social programs,funding mining schools and interns and what culture they are developing in the company from safety awards,awards for social programs,the transformation of IT throughout company and open mindedness towards outside industry ideas
.Hanagarne was a excellent addition with his wealth of experience from newmont after a stint in zurich with their refiners.
I will never forget this example of Wheeler culture Hanagarne found Rochestore moving ore multiple times before crushing he simply rectified that and cut costs by like 50%,they now have shortened haul roads and done crusher enhancements-they brought in on grants, teams that did energy studies that found changing pumps,lighting etc  could add huge savings,a new conveyor system that cuts spillage dust and man hours cleaning up-another issue was mill ball anddiscarded metal causing crusher breakdowns -all it took was a stronger magnet that was filtering tailing material.
Another favorite of mine was a new innovation technology a pebble sorter that identified ore in waste rock -a couple million that has added every 30 days a days extra gold production that was being thrown out with waste rock-that has paid for itself in first 6 months.
So you had qualified young mine managers and a culture of excellence,efficiency driven  across the board  and again it was repeated at Wharf
.Exploration benefited by rewards  of funding at Kensington.
Scholorships at mining schools ,summer interns and lectures at mining schools has made Coeur a go to company.
Coeur has just funded and supplied a scholarship PHD interning  to Northern Empire for a year for exploration and rock ship sampling.
Coeur just gave a donation to a local school next to Wharf mine about 80,000
Wharf mine although finished with high grade has raised production and efficiency to help minimize the lower grade going forward

Rassmussen is another Newmont guy that spent years around Nevada the a junior CEO down in Bolivia and Columbia
He is boots on the hround type that spreads the money around to juniors  in nevada-
Since coming on there was a new understanding of Rochestor that led to finding high grade gold (under infrastructure,jualin and a wealth of targets at Palmarejo.
Junior exploration CEOs and I/R love this guy-BOOTS on the ground a geos geo

All this info and much more was picked up from mining journals,local newspapers-Elko,Juneau times, and corporate releases from companies contracted for energy savings innovations,inventory control and equipment ..
I am a completely private investor and a sometimes trader these days
 silver gold dictate and algos rule this is a difficult sector with manipulated prices ,influenced media,political and taxation exchange rates, weather and human error-
makes it difficult to plan and profit as companies chew through reserves and mine lives onlt to have to replace with sometimes a decade from exploration to production
The volitility is why they call silver -"the devils metal" and the mountains and deserts are full of uneconomical old mines

  • edmund 
  • [*][*][*]
Re: Move to Chicago
Reply #8
I can't find the direct amount of tax credits and incentives that were given state investment package managed by dept of Commerce and Economic activity,economic employer training investment program and Economic development for growing economy corporate income tax credits-coeur was the 14th buisness to relocate its corporate headquarters-political spin
Coeurs corporate headquarters in restored building overlooking park and lake yet still downtown.
These are smart experienced management teams that are more than aware of difficulty of creating mine plans and focused on this area in recruiting-the results are showing at Kensington,rochestor ,palmarejo and Wharf.
Thanks for the push to further delve into the past and Krebs vision and strategies to completely overhaul this company.

Re: Move to Chicago
Reply #9
Live near the Welsh border, Cool, 20 years ago I worked at Cammell Laird Ship yard for about 5 months total doing engineering work for a drill ship rebuild. I liked the area. Lived in Birkenhead and loved the pub meals and getting into the countryside. Took a trip to the extreme north west of Wales one day and was surprised to see the salmon mounts in a sports pub on a river. Manchester was the main city, but crossing the Mercy to Liverpool was more fun for me. Cant say I like my time in London or Aberdeen so much, but then I was only in Aberdeen during January/February, very cold and wet. Some day I would like to make another visit to the Birkenhead area and on to Ireland.

  • edmund 
  • [*][*][*]
Re: Move to Chicago
Reply #10
Did you ever visit Chester where there is still a law on the books if you catch a Welshman inside the  city walls built by the roman. you could lynch him-
.Birkenhead is about 25 minutes from Chester but they are worlds apart-chester has a cathedral that took 200yrs to complete and a racecourse that will empty your pockets in a flash and shopping everybody comes for 45 minutes away but the malls are coming.
-.I grew up in Boston so having a great time watching the celtics rebuild
Liverpool is a far cry from the Beatles days but still corrupt-you must have loved the pints and pub atmosphere.Imagine Liverpool in the old days with all the goods coming through it supplying the factories.A tough bunch those Birkenhead dock workers

.But do i miss an american steak and chicken -meat is grass fed here not corn fed and chicken is pasty white not like good old american corn fed. chicken
.If you ever come over i'll buy you a pint or two.

  • edmund 
  • [*][*][*]
Re: Move to Chicago
Reply #11
often times short posts are aimed at management and it is often times true and investors are losing money or being diluted or have lost in past-BUT WHO ARE THE REAL CULPRITS
The Fed funded BANKS or their created hedge funds or the myriad of paper derivitives,the street that piles on or off creating even more greed or fear,the shifting of politics and taxation when prices are high,exchange rates,cost of energy that effects everything in mining and paper dumps on comex of billions in seconds .
Preciosa is an example of a buy at 30.00 dollar silver,the divestiture of Coeur Capital and Joaquin(politics and metals prices) ,the sale of Bolivia (politics) under guise of weather and govt taxation and mountain ban over 4400 ft to surface operation that reclaims land and uses no dynamite
Permitting that causes a 10 year time frame from discovery to production,exploration permitting and expansions
From 50 dollars an oz to 12.50 and gold to 1000.00 and coeur managed three expansions and three acquisitions during this period as well as engineering its balance sheet and interest
Govt's have attacked gold India and us to protect the Us dollar and India its rupee
And don't the banks love this as miners scratch to survive wasting reserves and then need money to buy or build
Give investors a three year mine plan to higher grades and lower costs accomplished on time (early) and Coeur profitable in 2016 and maybe for 2017 and the fact that silver went back to 16.00 from what 21.00 and share price is managments fault how many dumps have occurred ,how many investors taken in by GLS ,gdx,gdxj,2x and three times funds,option to name a few of the many derivatives.