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JungleJim1

384 Posts.

66

09/12/21

15:36

Post #: 58192526
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Originally posted by Johnyb888: ↑

Hi Leezy

The information as posted here by several people (not 100% confirmed but appears legit) clearly states almost all of the capital is for the gold side.

Also the raise as posted here will be for $100M at 67c... This is a lot more then 8% dilution, more like double that. And that is obviously for both businesses.

Since the money will mostly be used for the gold (Or FFX) my point was this.
They have had some amazing gold results from drilling earlier this year, however due to changing to an onsite lab we have had no follow up results or new results for some time. There is currently a very large back log on drilling results with the drills continuing to spin.
If previous results are any guide, there should be some great drill cores in the back log potentially showing there will be many more ounces on FFX claims. These results should start to come out early next year. And these could well hold up or increase the value of the gold side.
At the same time they are currently ramping up production with higher gold recoveries expected for the current and next quarter, further raising the share price. So 6, 9 or 12months from now the share price of FFX might well be at similar levels as today and if still needed they can do a CR then. This might have only caused 15 to 20% dilution to FFX and non to LLL.

And as the money is meant for the gold side I think the organic growth argument was reasonable.

And I agree this is a bullish Lithium market. LLL is almost fully funded to production and during the spin off there will be another CR (presumably to fill the capex gap) so it is extra bitter that LLL gets diluted (once again) by at least 15% while very little of the money will go to it.

So in short: The gold side of thing has significant cash available...If this gold side is as good as FFX has said it is (and which appears to be confirmed by previous drill results) there is no reason they can't progress while releasing favorable drill results and increasing production. This should lead to a higher price for the gold side and therefore the overall dilution should be less. There seems to be absolutely no rush to get this $100Million now.

Obviously raising capital doesn't hurt the future value of the business. But your slice of it becomes smaller. And this isn't exactly a low risk investment so continuously cutting the potential upside is hurting the investment thesis here IMO.
And who says this will be last time?? I thought the 47M would get them profitable...Then I thought the $50M from SPP surely would be enough?

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If they have a few sensational drill results Maybe they BOD are considering underground mining at Morilla. Its more expensive in the short term but a bonanza for the long term.

FFX Price at posting: 75.5¢ Sentiment: Buy Disclosure: Held
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