mining shareholders pockets again, page-11

Billmac with reference to your comments

"I have to disagree with you Robo, If the cap raising was even priced at 7 cents they would probally get oversubsribed if it was made attractive to existing holders. Given the last raising was @ 5 cents since then we have blown $5 million. Its fair to assume in 9 months TTR will be rattling the can again probally @ 5 cents again. This can only be described as pathetic."

I agree, it would have been a lot better if the capital raising could have been done at 7 cents but the way the market is at the moment I doubt it would have been supported even with attached options to make it more attractive. I am sure TTRs Board would have looked hard at all capital raising options and come to the conclusion that what they have chosen is the fairest for loyal share holders (particularly the smaller holders). I will be interested to see when full details come out if there will be an option to pick up shortfall if not fully subscribed. The way it is the largest shareholders (top 20 holding approx 40% of all shares) will only be able to contribute $300,000. So for this offering it is really encumbent on the smaller holders to come to the party. Also, will it be underwriten?

I don't consider the last $5m to have been blown. We have seen a lot of value added over the last 9 months. OK it is not recognisable in terms of share price / market capitalisation but it certainly has added insitu value and of course all cap ex and exploration expenses can be written off against income down the track. Remember TTRs management are running a pretty tight ship in terms of management, staff wages & overheads and they are outsourcing the majot feasibility work.

This capital raising will in all probability see the last of the smaller issues of equity for working capital and exploration. The next raising will be the big one in the December Quarter for project funding. This will be supported by the Bankable / Definitive Feasibility Study due at the end of next month and be a balance of debt and equity. The debt funding will be probably backed by a solid slab of flat forward hedging. All the solid exploration and infill drilling work (at a significant cost) over the last couple of years has made the project more robust/bankable. At a time where funding for junior miners has been very tough all this work has been critical.

The major project funding is so so critical and has to be "big enough" to for all capital works, mining expediture and sufficient working capital to see the project through commissioning and troubleshooting and into profitability. Insufficient funds can kill off mining companies dead in the water. Seeking "bridging funds" with less favourable terms later (particularly if metal prices have fluctuated down) can be hazardous.

At the present time Tectonic needs a top up to working capital and funds to followup the exciting exploration targets. Remember companies can quickly become embarased/ insolvent without working capital so anyone who buys shares in a junior miner has to realise that they buy a committment to keep the operation running........who didn't know that? (or are you only in it for the speculative punt). If holders are not prepared to back the junior miner then they have chosen the wrong area to invest in. Of course this is why choice of investment in this area is not to be taken lightly and you need to pick wisely.....Good Board, Good Management, Good Projects, Multiple Mines, Long Term Prospects (metal prices, area prospectivity, project longevity) etc etc.

Having said all that, I have bailed out of companies when I see trouble coming and sometimes I have been caught out badly when I did not see it coming....all education. So investing in junior miners is not for the faint hearted and certainly not for the impatient (sorry GZ and GS)and of course don't invest too much (10% max). Investment in good juniors can be very rewarding (with a bit of luck) but expect to lose on some - it is the toughest of all businesses to be in (Mr Rudd had little appreciation of this). Tectonic have come a long way with Philips River and through some very tough times but in relative terms another couple of years or so to be up and running is small time. Very few small companies with limited cash backing and staffing could get a polymetalic project like Phillips River up and running in less than 10 years. WMC took 13 years to get Roxby Downs up and running which although much much bigger they had huge staffing and cash resources - so in relative terms it demonstrates a point.

Good luck to Tectonic holders - almost over the hump!