I have no objections for raising funds as you mentioned. My only objection to your point is the timing of the raising with some concrete FA news to complement. It is rather when they should raise.
Raise now with no exploration catalysts for JZ to negotiate will result in a total sell down as CPS did with the last raising depressing the share price and will hinder movement.
Right now preservation of capital structure is a very critical process for a budding junior growing company.
Quantitatively there is a direct correlation to fully diluted shares and market valuations.
You referred to CXO, if you look at that thread you will notice I was one of the first holders of CXO at around 2c. Earlier on during that journey 7 months ago, CXO struggled to get credibility for its lithium project. During those days CXO had two small raisings only to fund preliminary exploration pre drilling. CXO were frugal, stuck to their plan and raised just enough. The SP was in the doldrums and languished severely quite similarily to AGY now.
Fast forward 7 months later, they were successful in defining and drilling these discovery pegmatites. Due to their frugality CXOs share structure is only ~280m shares on issue to this date which has resulted in substantial shareholder wealth being created. This low number of shares on issue allowed CXO to crack 10c easy and at 10c CXO is only worth ~$28M not including options making it still very cheap relative to BGS KDR... etc
I wouldnt be surprised if on a few more positive assays over there CXO, will crack 30c and then they can go for a much bigger raising to drill out their discovery.
Dilution cannot be avoided, that said, AGY needs to minimise dilution by raising at subsequently higher prices with commercial news to partner with the raising to maintain long term interest.
Say AGY has 1,000,000,0000 (1B) shares on issue in three months. You can forget about AGY having a crack at the 10c+ or 20c+ price ranges which equates to a $100M and $200M market capitalisation. Those ranges are for successful explorers with JORC categorised resources and or pre development listed entities who have completed scoping PFS BFS DFS.. etc
I am enjoying my substantial free carry on CXO, nothing more needs to be said over there the market and the herd have arrived and CXO has delivered.
AGY Price at posting:
2.6¢ Sentiment: Buy Disclosure: Held
