One thing I have found with financing is that shareholders are never happy. This is because a number of reasons. Dilution is the biggest gripe. For some reason people think you can just do a BFS and then loan $2 billion from a bank and pay back in 2 years. Like buying a house you need 10-20% deposite to avoid extra costs. For a company to get this 10-20% they have to do deals which either means dilution, merger or some sort of offtake where they are basically giving a discount on future sales.
I do hold shares in both HIO and MGT but hold twice the value in MGT because of the cost to mine. MGT could've done a PFS quoting 2 or 3 times the output with very impressive looking figures that would've got shareholders excited. However the day always comes where you have to work out how you are going to fund this.
i personally think that HIO's deal is ok considering where they are at in thier journey to development.
my rational for buying more MGT is because I liked there approach to moving towards Minning. The ability to mine from surface bringing money from day one of production is massive, the cost to a dig 50m of overburden off takes months and at great cost that has to be funded through loans.
MGT will still have to do some sort of dilution before they can get a loan but will be a much smaller dilution then what HIO needs.
back to the house scenario, HIO is buying a beachside house while MGT is buying 1 or 2 streets back. Once MGT builds equity they might just upgrade to the beachside.
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