The cap raising looks to be a very similar deal to what Integra pulled on its shareholders recently:
. substantial dilution of existing shareholders
. funds raised to retire debt, incremental increase in production, working capital
Several big differences imo though:
. Integra went to the market after its share price had been in a downtrend for a number of weeks whereas the ALD has been in an uptrend for the last six months
. ALD holds out the promise of a main board listing in London which if successful could well mean some form of rerating (?).
. the mine operation that ALD is going to expand is a working proven operation. IGR went to the market before its new mine had been fully commissioned.
. ALD seems focused on maximising its production whereas IGR continues to push money at early stage exploration.
All those extra shares sloshing around will likely mean that ALD's share price will in the near future perform similarly to IGR's share price post cap raising (?).
I am not looking to trade either IGR or ALD shares in the near term so it matters nought to me if I am wrong about the likely price movements.
ALD Price at posting:
$3.84 Sentiment: Hold Disclosure: Held
