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flyboy77

8,838 Posts.

408

08/07/16

07:05

Post #: 18221615
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Originally posted by flyboy77 ↑

Hi Jay,

In the ordinary theoretical cource of events yes it's dilutive.

But several things mitigate that:

1. This is an opportunistic CR - i reckon there's no way Archie and co. were expecting a share price in the 30s so early in the piece - a function of the gold price action and a (global) lack of serious exploration/development plays.
2. Let's say they issue 35m shares at 30c - for $10.5m - pretty easy to argue that's a great issue price for existing shareholders....the share price was in the low 20s only 2-3 weeks back remember. easy to argue in a sense a raising in the 30s, or near to, is kind of like an issue at a premium?
3. As another punter alluded to, this will be bedded down to instos very quickly - no momentum will be lost - and the gold price remains strong. No fluffing around for weeks with pissant retail investors on a rights issue or the like. I expect them to resume trading as early as today AND expect more good news today/next week - maybe drill results, maybe the geophysics of the surrounding ground (the 4km x 6km area) or eve acquisition agreements with local tenement holders.
4. There's a script being followed here - these guys are pros.

My question is what do they need $15m + in the kitty for?

1. Day to day working capital - Archie doesn't appear the extravagant type?
2. Further drilling - no need at Namdini until the Exploration Target is out (and that depends on the assay labs extracting their digits) - maybe Kungongo?;
3. Paying for land acquisitions? Well, sure but not that sort of coin (though Namdini no doubt has pushed up the value considerably of neighbouring tenements).
4. Drilling on 'newly acquired' land - well i guess with 4 drills on site they might as well use them if the geophysics stack up?
5. Corporate acquisitions - unlikely imo.

All in all, I think Archie is just shoring up the coffers whilst the sun is shining......the market can get ugly very quickly - as we've seen in recent years.

You'd reckon that bank balance will keep CDV going for many a year - and they appear very frugal - note their DD costs were circa $100/m - that's worthy of kudos!

Last time CDV will go to the CR space until production or buy out I'm hoping!
4.

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course!

CDV Price at posting: 32.5¢ Sentiment: None Disclosure: Held
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