1. Almost all mining stocks dilute to exist until they go into production...its a fact of life get used to it.
2. On cap raise and dilution 9 out of 10 stocks will see the raise price as the floor price after issue. So very unusual to drop below it and will not last long IMHO see my prev posts... It will return to above the Cap raise soon.
3. Mgmt "have" minimised dilution IMO...
Had they not tried to minimise dilution they would have had to do go to shareholders for a cap raise for $88 million to be in the same position as they are now. ie $70m for Stage 1 mine and $18m for Stage 2/3.
So they "did" minimised dilution. This was done by :-
a) $58m Loan from Banco Votorantim’s (No Dilution) b) $12m investment from Blackrock (No Dilution) c) Raised $18m whilst share price was relatively high
All 3 of these minimised dilution. Had they gone to shareholders to raised the $88m where would the share price be now??
You are obviously a short term holder for if you were a mid/long term investor you would not be worried about the 18m Cap raise ... Personally I think the fact that they raised whilst the SP was high was a good thing, much worse dilution if they attempted to raise at 5c.
I think the original intent of mgmt was to build stage 1 and use the cash generated for stage 2 ...bring Stage two online in say 3-4 years time.... a Slow option.
Mgmt gauged the interest and decided that in an "Extremely tough market" to raise capital there was the opportunity to grab an additional $18m to accelerate stage 2 and bring it into production several years early. They went for it.
I would have done the same...
Most CEO of ASX companies that I have met consider Day/Short term traders as the scourge of the market and couldn't give a "monkeys cuss" about them... its the mid to long term investor they seek to appease as they are the ones which cause the share price to genuinely re-rate the company upwards and to stay re-rated up.
...and IMHO they have done the absolute right thing for those mid to long investors. Its only the Short term players who are suffering and squealing loudly now. ...But it will be a short lived thing as soon the company will start aggressively building the stage 1 mine and aggressively drill stage 2... the AVB phoenix will rise shortly and the re-rate will be genuine this time around.
I can only assume given your headline of "Dog of the Year" you had sort to drive the price lower and accumulate more stock either that or your are just inexperienced/naive. Either way it matters not ... I figure the things will change drastically for the better when the mining licence is approved and the stage 1 Finance Deal conditions are met.
All is IMHO DYOR to Confirm.
AVB Price at posting:
6.0¢ Sentiment: Buy Disclosure: Held
