CMKM Diamonds Inc
Symbol CMKX
CMKM fans in dividend tizzy, await CEO interview2004-10-15 20:30 ET - Street Wire
Also Street Wire (U-UCAD) US Canadian Minerals Inc
by Lee M. Webb
CMKM Diamonds Inc., a subpenny pink sheet promotion headed by Urban Casavant, has a cult-like following that was recently thrown into yet another tizzy, this time over a purported dividend-in-specie distribution of shares of Australia-based WMC Resources Ltd. CMKM fans are also excitedly awaiting the release of a so-called interview with Mr. Casavant conducted by Internet tout Ed Miller of the Green Baron.
While the CMKM faithful will indeed soon get to listen to Mr. Casavant field some vetted questions gently lobbed by Mr. Miller, they will not be receiving any WMC shares as a dividend distribution.
The WMC imbroglio
WMC bears little resemblance to the gaggle of companies associated with CMKM, some of which already figure in dividend-in-specie schemes. For example, a distribution of shares of recently made over and virtually penniless U.S. Canadian Minerals Inc., which is trading on the OTC Bulletin Board, was paid on Oct. 6.
A dividend-in-specie distribution of privately owned and inscrutable Casavant International Mining, formerly headed by Urban Casavant and now led by Ron Casavant, is slated for Oct. 18. A distribution of shares of pink-sheet traded Juina Mining Corp., a non-reporting company, will follow on Nov. 15.
WMC is a horse of a markedly different colour; it is a major diversified resources company that produces nickel, copper, uranium oxide, phosphate fertilizer and other products. The company reported an after-tax profit of $515-million (Australian) for the six months ending June 30, 2004.
The hullabaloo over WMC erupted after a British CMKM shareholder reported that he had received a TD Waterhouse corporate action notice advising that Mr. Casavant's pink sheet promotion had announced a distribution of WMC shares.
According to the Oct. 7 notice from TD Waterhouse, which was scanned and posted to the Internet, on Nov. 15 shareholders would receive 0.00012267 of a share of WMC for each share of CMKM. That is exactly the same payment date and ratio that has been officially published for the dividend-in-specie distribution of Juina Mining shares.
The possibility of a hoax or simply a clerical error by TD Waterhouse was largely dismissed by many of the cult-like CMKM followers. Indeed, according to one of the most widely followed CMKM Internet gurus, identified as U.S. Air Force officer Major Sterling Collins, the notice of a distribution of WMC shares was not likely a mistake at all.
"I believe it is very likely to be true and I think I see why besides the minerals and resources involved," Mr. Collins told a large group of his Internet followers on Oct. 11. "I think I can make some sense of this."
Apparently the sense that Mr. Collins could make of the WMC imbroglio turned on some convoluted gobbledegook involving a circular cash flow economic model, whatever that might be.
WMC, however, made more succinct sense of the matter.
"WMC Resources has no relationship with CMKM Diamonds," WMC spokesman John Higginbotham advised Stockwatch.
According to Mr. Higginbotham, WMC was trying to contact TD Waterhouse in both the U.S. and Britain "to alert them to this misinformation."
There will not be a dividend-in-specie distribution of WMC shares to CMKM shareholders.
Meanwhile, many of the excitable CMKM faithful have moved on to other wild speculation, making much ado about the upcoming release of Mr. Casavant's interview with the Green Baron.
Urban talks to tout
Mr. Casavant, known more familiarly among CMKM fans as "Urban" or "Urbie" or "UC," has reportedly already been interviewed by Mr. Miller, head of the Internet tout service the Green Baron.
U.S. Canadian Minerals chief executive officer Rendal Williams, in a reprise with Mr. Miller, took part in the same interview that will be made available to Green Baron members on Oct. 17 and released to the general public on Oct. 18.
Mr. Miller has been fishing for an interview with the elusive Mr. Casavant for quite some time, even attending some of the funny car races that CMKM's leader used to frequent in an attempt to chat him up. Evidently that did not pan out because Mr. Casavant did not show up at those particular races.
In any event, Mr. Miller reported in one of his earlier touts that Mr. Casavant had been advised by legal counsel that it would be best to postpone any interview until after CMKM became fully reporting.
The fact that Mr. Casavant has participated in the Green Baron interview to be generally released on Monday has, of course, sparked another frenzy of speculation among the company's faithful followers. Indeed, among other things, speculation is rampant that CMKM will have reporting status before the interview is released.
Many believe that just such an announcement will be made before the markets open on Oct. 18, possibly even some time this weekend. Some more skeptical observers, widely known as "bashers," express doubts about whether CMKM, a company with more than 779 billion shares outstanding, will ever become a reporting issuer.
To this point, CMKM has not made any filings with the U.S. Securities and Exchange Commission signalling a return to reporting issuer status, something that would undoubtedly be of interest to both the company's faithful followers and skeptics alike, if it ever happens.
Given that the interview questions were previously vetted by Mr. Casavant and Mr. Williams, the eagerly awaited interview of Mr. Casavant is not likely to involve much, if anything, in the way of questions that would require specific answers about such things as the share structure, the company's financial status or other hard facts that are generally available to investors in reporting companies.
Among many of CMKM's faithful followers, however, fantasies trump facts, so an abundance of puffery and a dearth of solid information emanating from the so-called interview may not cause much of a stir.
Indeed, it is quite likely that any puffery will be far easier to fit into the fantasies of the starry-eyed naifs who seem to believe that CMKM has an "intrinsic value" of a trillion or even several trillion dollars, huge deposits of valuable minerals that pretty much span the spectrum of the periodic table and a massive short position that could top a trillion shares, among other unlikely things.
Quite apart from the fact that Mr. Casavant and Mr. Williams previously approved the interview questions, it is not likely that Mr. Miller would press his guests on any issues that might trouble CMKM's faithful followers or dampen their enthusiasm for the pink sheet promotion or hinder the U.S. Canadian Minerals promotion, for that matter.
After all, the Green Baron is a tout service, though the CMKM and U.S. Canadian Minerals touting is reportedly being provided free of charge. Moreover, Mr. Miller, who touts CMKM as "the stock play of a lifetime," holds shares of the company, as does his father at his suggestion. They probably hold shares of U.S. Canadian Minerals, too, given the dividend-in-specie distribution of restricted shares of that company on Oct. 6.
U.S. Canadian Minerals, which reported no revenue and a picayune $1,321 (U.S.) in cash for the quarter ending June 30, 2004, has been on something of a tear lately. (All future amounts are in U.S. dollars.)
The stock price flared to a rather astonishing $18.50 per share on Oct. 12 before giving up some of the gains. The following day, the company announced a three-for-one forward stock split, now set for Oct. 25.
Sour note
Evidently the recent trading activity and price spike in U.S. Canadian Minerals caught the attention of Stocklemon.com, an Internet publication that bills itself as "exposing lemons on the OTC market." It is widely accepted that Stocklemon and some of its followers engage in shorting OTC companies identified as lemons by the publication.
On Oct. 15, Stocklemon.com published its unflattering assessment of U.S. Canadian Minerals in what may be the first of several articles, if the publication follows its usual pattern.
"The business of UCAD (U.S. Canadian Minerals) has been a slew of convoluted deals and swaps with virtually worthless pink sheet companies," the Stocklemon report states. Mines and money have been swapped between them all, but it still leaves shareholders with no real value. The mines have no proven success; you can shuffle worthless entities around all day long, but at the end of the day you still end up with nothing, regardless of share price."
After examining several other matters and offering opinions, Stocklemon provided its conclusion, among other things mentioning CMKM.
"We are aware the CMKX has a large shareholder base and we respect people who invest their hard earned money in the markets," Stocklemon says, in part. "Yet, the stock market is not a get rich quick scheme and investors should do substantial due diligence before ever buying a penny stock.
"Remember, if you can't bet on the horse, bet on the jockey. In this case the jockeys do not have an investment grade track record.
"Please take this report as a respectful warning to all of you who might spend your hard earned money buying this stock."
Evidently the Stocklemon report drew considerable response, including reactions from CMKM shareholders. Indeed, the extent of the response and some of the reactions apparently even surprised Stocklemon's editor, who is no stranger to receiving rather harsh comments about his publication.
Meanwhile, the Stocklemon report did not have an adverse impact on the share price. In fact, with 192,150 shares changing hands U.S. Canadian Minerals gained $1.45 to close at $14.45 on Oct. 15.
CMKM rang up a volume of approximately 16 billion shares and closed unchanged at two-100ths of a cent on Friday.
The saga will continue.
Comments regarding this article may be sent to lwebb@stockwatch.com.
(More information regarding CMKM Diamonds and associated companies can be found in Stockwatch articles dated Oct. 21, 2003; June 22; Sept. 16 and 24; and Oct. 1, 2004.)
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