I think you guys are misreading the situation.Extremely...

I think you guys are misreading the situation.

Extremely difficult for any company in the mining sector to raise equity capital at the moment. Even producers are struggling to attract funds from brokers. Have a look at recent capital raising announcements re poor take up or cancellation due to lack of support. So what chance a junior explorer?

A few years back a junior with potential would have had a number of brokers begging to become involved, with their clients pouring money into the sector. Completely the opposite now. Brokers have all the power and junior explorers will have to cop whatever the broker demands to get money in the door and stay alive - high fees, on-going monthly retainers, options, heavily discounted pricing, dilution...you name it.

As a rule of thumb, a junior should start devising plans for a raising when their cash hits $1.5m to $2m. VMS had cash of $2.4m as at 30 September. One month later this could be down below $2m. Management would no doubt have commenced canvassing brokers some weeks back about a new raising.

The brokers would be aware of the upcoming tin resource and no doubt would like to get set beforehand to give their clients some chance of a gain in a terrible market. VMS would have little chance but to give into their demands. In any event, news is being ignored at the moment, so do you think that the tin resource will have much effect on the share price anyway? Probably not.

The best thing for VMS shareholders is for VMS to stay alive. Management should do whatever they can to ensure this happens so that we can all benefit when the market turns. Capital structure is tight, so I am prepared to cop some dilution now with an eye on the potential prize. Note that if a rights issue is undertaken, there will be no dilution if you take up your rights.

Just my 2 cents worth...