There was a short selling report on a clutch of mining companies just recently. One of the killer facts attested as to why this was all a scam was that one of the directors involved in a couple was also a brothel owner. Not entirely sure why this was considered to be such a demerit – it was in Nevada, where such can be legal. And, well, having someone who knows how to run a profitable business is an interesting innovation for a junior mining company. Perhaps that’s what was being complained about?
Remote mines are staffed largely by men so wouldn’t we expect the odd brothel to spring up nearby? Perhaps someone wants to be on the inside to get ahead of the competition when new mines are being planned?
It’s the old company shop business model, isn’t it? Pay part of the wages in scrip, redeemable only at the company shop. Except in this instance the shop is a brothel.
These days, mines are less labour-intensive and the workers better-skilled (you don’t want idiots operating million-dollar machinery); so a company shop would be a tiny portion of profitability. Hardly worth the tail risk (Headline: “Dead Whore Found in Company X’s Mine”).
Best-case: the on-site brothel is for the workers’ Health & Safety.
Middle-case: the mine-owners are shrewd businessmen who spotted an opportunity in brothels.
Worst-case: they’re brothel-owners who have accidentally stumbled on the fact that appending Mining to your company name attracts investors today just like adding .com did twenty-plus years ago.
“Except in this instance the shop is a brothel.”- a case of vertical integration? but in this case lateral seems more apt.