There has been alot of negative comments about the capital...

There has been alot of negative comments about the capital raising and the price it was done at. It seems to me that alot of these comments reflect a lack of understanding of the companies assets which are clearly stated on the companies website. The plan is very simple:refurbish the
existing 1.2my/t/annum plant in combination with a further 400,000 from toll milling right next door. This ramps up capacity to 1.6my/t/annum by the last quarter of 2008.They have a pipeline of projects with a resource base of 1.8my ozes averaging 2.5g/t/Au to feed the mill. By the time they have refurbished the mill Focus will be debt free and hedge free. If their average recovered grade is 2g/t/Au that equates to gold production of ~100,000 ozes/annum, if it is 3 then that generates 150,000+ ozes per annum and so on. From the project pipeline their average projected cash cost is $714 for their underground assets so if you assume a gold price of $1400/oz in the first case then the company generates ~$70my profit/annum, in the second case it generates 210my.
Compare this to Avoca which is currently ramping up to producing 150,000+ ozes/annum @ $700? cash cost(guessestimate as I can't find it in their quarterlies)and a resource base of 1.45my oz. They are currently capped at 423my.
Hello!
After the raising Focus will at current price be capped at ~70my, half of which will be backed by cash and combined with the fully permitted Three Mile Hill plant covers market cap with no share price value for production cash flow, 1.8my ozes of jorc resources, exploration ground or exploration upside and nickel assets.
The price that the raising is being done at appears to be a major concern however IMO they had little choice, with both company growth and cash flow being dictated by mill access. Banks are not lending, share holders are not supporting any share raising,and stock brokers are not underwrighting any share issues. So what's left?
High wealth individuals and institutions who will only invest if they are convinced of profitablity, growth and most importantly if they can get set with enough shares at a price they consider a bargain. Whilst Focus is putting out a further 1.6by shares I doubt if we have more than a dozen new share holders which imo will tighten up the share registry and in effect reduce the dilution effect. In general they will be in there for the long haul as thats' where they will make their money. Sure life isn't fair and the fat cats make the money but all the shareholders benefit in the long term if they are not day
traders. Besides we all get the opportunity to participate in the SPP at the same price.