Question, what sort of
capital raise frequency do you like AW1 to conduct to fund future exploration activities of say $15 million per annum? Option A, B or C?
- Option A: 3x per year raising $5 million each time,
- Option B: 2x per year raising $7.5 million each time
- Option C: 1x per year raising $15 million in one event.
Keep in mind, factors such as,
- The company's current financial position and cash flow
- The scale and scope of its exploration activities
- The level of investor support and market conditions for raises
- The company's overall growth strategy and ability to respond to unexpected opportunities or challenges.
When it comes to funding AW1's exploration activities at say around $15 million annually, there’s no one-size-fits-all solution. Reasons for each approach,
Option A: 3x per year raising $5 million each timeThis option might seem attractive for its frequent cash injections, allowing the company to top up the coffers more often. If smaller exploration milestones are on the horizon, it provides the cash flow to support them without committing too much capital at once. But here’s the downside—each raise comes with transaction costs, which start adding up quickly. Plus, asking investors to chip in three times a year could dilute confidence (not just shares) and send the wrong message to the market. It’s like telling the world, "We need money constantly." That’s not the best look, is it? Although, in this case, the capital raise is occurring behind closed doors for a special reason.
Option B: 2x per year raising $7.5 million each timeThis is the sweet spot. You get the balance between flexibility and efficiency. Fewer capital raises mean fewer transaction costs and less dilution, while still maintaining the flexibility to pivot if market conditions change or if the drill results point to something juicy. Investors don’t get hit with dilution as frequently, and the company keeps the door open to respond to surprises—whether they’re good (think unexpected discoveries) or challenging (market volatility, anyone?). It’s like setting yourself up for success without overcommitting too early.
Option C: 1x per year raising $15 millionThe "go big or go home" approach. One major capital raise provides a solid financial buffer, giving AW1 the muscle to execute on an aggressive exploration strategy. No one likes being tied down to frequent raises, and this option eliminates that completely. Lower transaction costs? Check. Less frequent dilution? Double-check. But here’s the risk: timing. No one can time the market for the best share price. Raising capital in the wrong conditions could lead to massive dilution, and there’s no backup plan if things go sideways. It’s a high-risk, high-reward play.
So, Which One?Option B is where the magic happens in my opinion. It offers the perfect balance—enough flexibility to keep up with the dynamic nature of exploration while avoiding the constant grind of fundraising. You get reduced transaction costs and more control over timing, making it a savvy move to keep AW1 nimble and ready for whatever the market throws its way.
Ultimately, it's the Board of Directors call and for the reasoning for the latest capital raise event for Storm or Utah Assets we will soon officially learn.
What are your thoughts!!!
(20min delay)