rmx on 13rd feb 2014, page-54

I mentioned early in the piece that I was very happy with the limited amount of shares the company was issuing, that they were only raising the money they need. On that basis I understood the strength of the share price. It differentiated the company from others who are opportunistic when they raise money and try to grab as much as possible. The fact is, before the start of this cash raising there was 481mill shares. The end result (after sophisticated and shareholders issue) is that there is 686mill shares (all these are excluding options). That's a 42% increase in shares. I don't care who you are, with that sort of dilution, you are going to see pressure on the share price and it almost always inevitably drifts back to the issue price. I am not saying it will, but now at 2.2c it's a damn well lot closer to that issue price than it was at 3c+.

Add to this the delays in announcing the scoping study and some of the puzzling comments made by the MD particularly in regard to the placement, just looking from the average general investor's point of view, you can understand the selling pressure. Remember this is a speculative stock and it doesn't take much to scare the investor. Then we have the high number of traders, evident by the high volumes of the last few weeks. More added selling pressure. Current action just doesn't surprise me at all.

Saying all that, it's these sort of situations that create opportunity. That's why I like to free carry these sort of stocks. If you can get a couple of decent trades in on the wild up and down swings, then you are basically risk free to carry forward for the longer-term. In the end, the company has gold in those hills, we know that. The current risk is whether the veins travel deeper to make this a long-trm sustainable mine. If they do, then you have a company maker on your hands and much share appreciation from this point on.

There's certainly risk in this, but does the potential gain outweigh the risk? That's the decision an investor has to make.