Firstly, a CR is inevitable this financial year. This is not news. The company not only states total confidence in its ability to do so in the recent Annual Report, but retains a healthy cash balance of close to $10 million which gives it the flexibility to undertake a raising when it is most advantageous. In the current environment, the most obvious rationale for going sooner rather than later would be to fund capital expansion in Chile. And that wouldn't be a bad thing.
Secondly, I would have thought that existing or prospective conerstone investors with a long-term view would be much more concerned with the successful demonstration of the technology than with the SP. Presumably they are pleased with the close to 6-months of consistent gas flow since Panel 2 was flared, and look forward to connecting to the electricity grid and after that, flaring Panel 3.
Thirdly, the cornerstone investors that participated in the last CR would have done so in full knowledge that it would be enough to fund attainment of first revenues from Bloodwood Creek, coal exploration in the US, and works for the first panel in Chile, but not the last capital injection required on the route to commercially sustainable revenue generation. No surprises there.
Fourthly, the dismal SP just means that existing or prospective conerstone investors can get more equity for any given cash contribution. A bad outcome for retail investors like me but not necessarily a disincentive for cornerstone investors looking to top up.
I am way down on this one, but remain optimistic given the company has big corporate backers and keeps ticking its technical milestones. CNX seems a good company, down on its luck. I respect your right not to share that view, even if I disagree with the ethics of you coming on to this thread just to kick dirt in the faces of shareholders that are doing it tough.
CNX Price at posting:
16.7¢ Sentiment: Buy Disclosure: Held
