Ok... so there is no doubt this is not a good outcome for holders, as dilution is never good. Of course, there are proactive things holders can do, take up the offer, buy more shares, average down etc or of course sell.
IMHO, ABU is quite literally the cheapest gold stock with a multi million ounce resource, with 1 respected J/V partner with hopefully more J/V to be signed in the future. The injection of cash, plus the bonds being covered should enable ABU to have approx $13-16m in cash to undertake a systematic and expanded drilling campaign for the rest of 2016 & 2017. Considering the current market cap and E/V, the company should look quite different by mid april. Sure, we will not be producing, but... considering that becoming a producer has basically destroyed 75% of shareholder value due to a total lack of.... I wont say more as I prefer not to get sued... suffice to say, with a new, streamlined board, admin costs down, drilling rates as low as they can go and a huge amount of prospective acreage. ABU is now for me, the cheapest and arguably most prospective Australian based explorer.
I am down a significant amount on my overall investment, so as above, the choices are pretty clear. I will be taking up my entitlement, plus will probably buy more, to get my average down to $0.10. I think that seems a reasonable price target considering how hated the stock will be in the short term. Quite a few gold stocks over the past 6months have raised capital and their share price has soared above the cap raising price, more than 130% in some cases (DCN, TRY, BDR, KDR etc). The main difference between them and ABU for me, is management, we are still suffering because of a failure at the top. With Brett flushing the proverbial 'can', we are hopefully seeing a reset of the company.
I am extremely happy to see the raising is fully backed, so no matter what, Brett is able to start locking in the drilling campaign etc etc. My prediction is by April, we will see at least 1 more J/V, plus a large drilling campaign laid out, with clear goals on what they want to achieve.
I again re-iterate, if I had not invested in ABU, I would have probably put my capital into RMS, and as an opportunity cost, it hurts a lot (300-400% return versus a loss of 75%), I would have been debt free even. Arg. I humbly believe Brett is doing what is needed, to strengthen the company and make sure that its cash balance stays strong so it does not need to do further dilution except when the share price has substantially risen and it therefore worth doing.
Good luck to all holders, I can very much understand why many are so angry, I am not trying to get others to take up the share placement etc, just trying to offer a differing view.
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