looking good, again!, page-10

Matt, have a look at the chart over the past year. Then overlay this with company development markers. You will see a major disconnect. I believe that dilution can only go some of the way to explaining this lack of price appreciation.

I have often noticed that the real opportunities for investors lie where a company has had it's price held back through to dilution because the market lacks consideration as to where the raised capital will take the company.

Often the market will assume that the share price will head back to the price at which capital is raised, without any tangible explanation. This is usually only the case when capital is raised to carry on the status quo. Junior that constantly dilute to raise capital for neverending drilling programs fit into this category. However, when a company raises capital which changes the whole outlook for that company in a positive manner, the price is often rerated.

Easy money? Yes. But only if you have the foresight to recognise the above.