Unquestionably no one likes dilution of stocks. Dilution only...

Unquestionably no one likes dilution of stocks. Dilution only makes sense when a company is raising cash to buy something which is valuable and deliver long term growth.

The key point is that LOD does not currently own its energy projects that it is so heavily focused on - it only has the right to earn up to 50% in return for funding exploration costs. This is currently a risk for the company - particularly if it does not meet the farm-in conditions.

As I understand from ASX announcement, the proceed from new LOD share issue will be used to immediately own 100% of Tambo Coal & Gas Pty Limited and Moreton Energy Pty Limited, which LOD currently doesnt own.

You will need to understand LOD is still in exploration stage, hence need to raise equity to fund expansion, hence I dont think the new share issue/dilution is poor decision in this case as LOD is buying projects that are valuable and will generate future growth.

Per LODs ASX announcement on 22 December 2009, The acquisition of Tambo Coal & Gas Pty Limited and Moreton Energy Pty Limited are free from any royalties, will eliminate Lodestones ongoing farm-in obligations, allow direct ownership and management of the relevant coal and petroleum tenements within the Lodestone group and result in a larger market capitalisation for attracting future institutional investment and investment research. this is an exciting news for LOD shareholders.

LOD subsidiaries currently have farm-in arrangements with Tambo Coal & Gas Pty Ltd and Moreton Energy Pty Ltd, under which they have the right to earn up to 50% of those companies/projects. The share issue and acquisition means that LOD will immediately own 100% of the projects, which will allow greater flexibility for commercialising and monetising those projects, and as shareholders of LOD we will reap the benefits.

We just need to be patience and help the company completes these acquisitions. Additionally, I understand Independent Expert Report will be coming out soon that will provide further insight into these acquisitions.

Not to mention, Greg Baynton will be escrowed for at least one year on his new shares, which gives the assurance that Shareholders are not short-changed. Not to mention Greg's excellent track record with other listed companies, such as PWK.

BTW has anyone seen Clive Palmers $60B coal deal with China.coal sector is looking attractive.

http://www.brisbanetimes.com.au/business/clive-palmer-scores-biggest-export-contract-worth-60b-20100207-nkvg.html