I hear your angst on MOD and this CR. I am not sure however that the criticisms are fully justified.
MOD has an excellent known deposit and is valued at a hefty discount to the PFS NPV and offers a solid IRR and reasonable capex. It is also located in one of the highest ranked countries in the world for mining (I know ... who would have thought Botswana was right up there with Canada !!).
MOD need funds, however, to fully realise its potential across its massive tenement blocks. I have heard criticism before on these threads about how slow the drilling campaign has been, in part due to Botswana regulations.
Now they are raising funds to drill their blocks and potentially find massive new resources to add LT value to the company. MTR certainly think it is value for money here.
MOD, in the ST is in a cleft stick. Cu prices have dipped and speculator positioning has also waned in recent weeks. US equity markets are setting up for a possible major inflection point (bearish) and capital markets are a little skittish.
So what should they do? Raise no funds and see their Treasury dwindle and not advance their project? Wait and hope for a better SP before raising but risk an even worse setup if US equity markets roil?
Or should they take the "bird in the hand" and get on with adding value.
For existing shareholders, sure there's a bit of dilution but it is reasonable to assume given all the possible drill targets that for every $1 raised here MOD may be able to turn that into $2, $3, $4, ??? through the drill bit.
If you are a LT holder, don't look at the daily SP. This is temporary. Value will show through in time.
Personally, I am adding to my position here and will continue to do so even if MOD continues lower to fill the gap at 3.9c.
Cheers
John
MOD Price at posting:
4.6¢ Sentiment: None Disclosure: Held
