Ann: Capital Raising Presentation December 2018, page-83

In general, I think management have done a very good job in getting this done. I had my doubts that in these equity markets (it's horrible for developers/explorers), they could raise the necessary funds despite this being a no brainer except for it being located in Burkina Faso. Could they have waited - may be. Who knows what the markets and Burkina Faso will be like in time. The takeover hasn't come, and now you've got to build it and realise the value of gold in the ground.

From the street, the banks were all over this. I suspect they have chosen Taurus as they were happy to go with the high debt/equity ratio, which is too high in my opinion. I can understand the desire of management to limit dilution with the current share price but if I was management, if there is ever a sunny day, I would raise more to keep exploration news going and ensure they have enough to cover the known and unknown risks.

Look at Gascoyne and Dacian who have both had to go back to the market as they seem to have missed the need for working capital - the plant or mining doesn't ramp up as you expect, a certain amount of production gets locked up in inventory, first fills and consumables are more than you think, and there are issues with the design you need to fix. Also Gold Road has experienced increases with construction costs but were fortunately insulated by the cost overrun with Gold Fields.

I'll put my house that there is another equity raise before this gets to commercial production, and I'd encourage management to take all they can now or at the very least not wait to announce bad news and then raise. My one gripe is that they didn't do a rights issue. Those who took part in the placement could have fully underwritten a rights issue and most of the money would have been received upfront from institutions in a few days. Those who didn't participate would have had their allocation picked up by those new institutions. Retail investors lose again. I don't know all the details, so can't be too critical but I suspect they could have done this.

Now comes the hard part for us investors. Holding you're nerve as the price trades flat for the next year and a half (assuming management execute on the plan). For those with entry points about 25c, it will be a while before you get out of the red again but  know that you will. I suspect there will be some good buying dips along the way to average down.