"only risk is more and more dilution"
This is a huge risk for us.
Our last 2 capital raises were in the Dec quarter and we raise ~$10m to do the work we need to do.
Raising $10m today would mean 43% dilution ($10m ÷ $23m market cap) and that doesn't even account for the 15% discount that the funders will want.
If we do not hit at Malachite the share price might go to:
-$0.035 meaning 54% dilution ($10m ÷ $18.5m market cap)
-$0.030 meaning 62% dilution ($10m ÷ $16.0m market cap)
This is brutal!
"The Mix"
A) The above math effects investors and shareholders (owners), particularly if you do not pay to maintain your % holding.
B) It does not effect traders of our shares
C) It does not effect staff who do not buy shares or people who get shares for free.
Below is "the mix" of how this company is valued and the domains in which the above parties fit in.
When management say they want to find 5m oz + or make the share price go up 1000%, they are operating based on Market Capitalisation and Share Price, this does not consider Share on Issue.
This means they can dilute for 5 years in a row and take SOI from 300m to 1,000m and it's ok.
This also means they can drive the share price to $0.010 and then when a discovery is made the share price increases by 1,000% to $0.100 and it's ok.
None of this is for the benefit of Category A) investors, shareholders or owners.
Traders get to trade and management get wages and performance shares without having to pay for them.
Strategy
The corporate strategy from the annual report:
"Strategy is the action plan that takes you where you want to go, the tactics are the individual steps and actions that will get you there".
Great strategy, but I'm definitely feeling the pain of the tactics as an owner/shareholder.
-To me, "making a significant discovery" means adding ounces.
I have no idea how walking away from 600k oz works towards this... it just doesn't.
Thankfully they're walking back this decision and looking to explore in the resource corridor again.
PROBLEM IS THEY NEED TO MAKE IT SUPER CLEAR TO THE MARKET THAT 600K OZ IS BACK ON THE TABLE AND WE'RE NOW LOOKING TO BUILD ON THAT AGAIN!!!!! Not just, ohhhh we're going back to the resource corridor...
What if we hit at Malachite, pepper it with 10klm of drilling and get 600k oz there.
Do we stop because more ounces aren't in the immediate proximity or do we keep look a bit more along strike to find the next best thing.
Before you get to 6,000k oz you need to get to 600k oz... Hello.
-We're now ~2.5 years into Malachite and we've only drilled several holes in the thing despite its potential.
I have no idea how big the current drill program is, I looked and couldn't see but I'd bet it's <5klm.
Why not just pepper the thing with 10,000m of RC drilling and be done with it.
Why do we have to come back next year and re-drill again.
If we're back next year then that's 3.5 years for Malachite.
It feels like we're on a date with a chick and we want to do a lot of 1st and 2nd base things, and maybe small amounts of 3rd base moves as well, but we don't really have the courage to hit it hard and go for that home run.
If I worked at the AAM head office I'd do a scenario analysis on 1) how much it would cost to RC drill 10,000m today vs. 2) the cost of 2,000m and all overheads required to maintain the company related to Malachite to get to next years drill season.
If these two are even close then I'd go with option 1).
-I love B2 Gold as a partner/shareholder and I'd envisaged that if we were to ever make a discovery we would take it to PFS stage and then B2 would buy us out. Why bother going through mine construction with unexperienced staff when you can just let the pros do it.
That being said, what value do the following tactics add to the share price that B2 Gold would pay a premium for in 3 years if we have a deposit to sell them? Because my experience in takeovers/consolidations is that overheads get slashed... that's the whole point of a takeover/consolidation.
* A flashy rebrand and name change
* TSX listing (are you telling me Eric Sprott, Rick Rule, B2 Gold cannot buy on the ASX)?
If he hit 5m oz in 3 years and B2 Gold take us over, both the above two initiatives are being scrapped and binned.
There are soooo many positive factors about the AAM story which I'm not mentioning as I'm hoping to have some constructive conversations about the goings on here.
There's too much complacency amongst shareholders imo.
Happy to be corrected if I'm wrong on these numbers or my thought process.
I do not have mining experience, my experience is in other commercial/finance areas so please DYOR and correct me if I'm wrong on any of the above.
Best of luck punters.
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