Andrew
While they are increasing their 'production' focus, its only early planning stages at the moment, so these types of costs in themselves do not require any capital raising anytime soon. So I wouldn't even worry about this.
As a producer based on what its got so far, say 250G oz grading at 1oz per tonne, the SP is probably worth around $2 to $2.50 assuming they have around 140 million shares on issue after raising the required CAPEX (I have no idea what this amount will be so just plucked that figure out of the air - probably a bit high and it assumes a lot of things). So that price ($2-$2.50) is really not much higher than current.
So as I've posted recently, if you are an investor looking for significant capital growth, you should look at this as ab exploration play, not a production play. That's where the upside is.
Sure the current SP is reliant on it actually getting into production at some stage, but in my opinion that is not even a questionmark given the project quality.
A moderate capital raising however is likely at some stage since they have a HEAP of exploration planned. Other than Andy's Well, they want to hit Magnet North, Abbotts, Webbs Patch and probably some of their South Aust assets as well, particularly the one adjacent to the Tunkilla project. And they're only the ones that come to mind. To adequately explore all those, they probably need around $10M. As you say though...who cares if they are doing the CR at current prices...thats bugger all additional shares. Its the poor companies with much lower prices that CRs like this would really hurt given the amount of dilution.
Cdchi1
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