funding for up to $25m from pacific road capit, page-12

I don't like it.

Yes, it allows us to agressively drill Nymagee North, Federation, QueensCross, Zeus etc. Otoh, we could have done that soon enough, once Hera was up and running. Or we could have done a gold forward sale when gold was trading higher than now.

Nymagee as it stands is big enough to go ahead with phase 2 imO - it's not like we need more funding for that.

This kind of dilution sucks big time. We are worth way more than 25c - even if Mr Market is too stupid right now to realize it. We would have traded lots higher once Hera was up and running.

All in all, the traders should like the deal and I think we will move faster to 40c then without it; but for us longterm investors it sucks - future dividends just took a sharp cut and the possible $2-3 range for 2018 posted in one of the latest broker reports just flew out the window.

What I always liked about the co was how they avoided any unnecessary dilution. I'm sorry to have to say it, but this looks more like management getting worried about their options and getting antsy to build their empire than a management caring for its long term shareholders.

Anyway, clever move by Pacific. Maybe I should ask them to hire me when my current contract runs out ... ;-)


P.S. One thing I kinda like about it: Phase 2 financing can be used to pay of the first tranch of Glencore convertible options piced at 0,20 (or was it 0,25?)). So if in 2015 we trade for say >0,40 for a while but need our cash for other stuff we can sell 20 mio shares to Pacific for 5 mio and avoid giving Glencore the right to convert those 5 mio into 40 mio shares. OTOH, I expect us to be able to pay of those Glencore options from cash flow anyhow. OTTH, you never know whether we find so much stuff that we want to buid new plant at - say - Federation ...