Whilst I too was surprised as to the timing of this capital raising and somewhat disappointed at the dilution created I have taken comfort from the fact that Gene and his management team have not let us down to date and, on the eve of a TSX listing, believe they would not be about to start now. So, after some research and analysis, this raising in my view, is just another feather in the cap of CPL's management and the value they are creating for current and future shareholders. Here is my reasoning.
With a TSX listing pending CPL have managed to attract the support of arguably the number 1 Investment Bank in the world and LARGEST in the US in J.P. Morgan and the second LARGEST broker/dealer in Canada and the Number 1 in the world for Metals and Mining in BMO Capital Markets (as per Global Finance Magazine June 2010 rankings).
So the common theme here with respect to word association and CPL seems to be WORLD CLASS, LARGE, HUGE and BEST
Here are the facts as we know
- Developing one of the LARGEST export thermal coal mine in North America
- Gene states that Vista has first world infrastructure and a WORLD CLASS resource - About to list on the LARGEST mining exchange in the world
- Supported by the LARGEST in US / BEST in World Investment Bank in JP Morgan
- Supported by the second LARGEST Canadian broker/dealer BEST in world for Metals and Mining in BMO Capital Markets
- Highland Park (Colin Steyn and Associates) CPL's LARGEST shareholder. Colin Steyn and Associates, former CEO and founders of LionOre, subject of Canada's 10th LARGEST corporate takeover in recent history
- LARGEST Coal project Gene Wusaty, Denis Lehoux and Dermot Lane have been associated with in their combined 80 years of coal industry experience
In Gene's own words
"Having the support of BMO Capital Markets and JP Morgan as the Company continues to develop the Vista Coal Project and progress its proposed listing on TSX will be a HUGE benefit going forward".
My take is that JP Morgan and BMO combined would not get involved if the potential was not LARGE or evident and that their support at these levels will be nothing but extremely positive in relation to post deal market support and research and down the track, project funding. The only thing that is not world class - big - large - huge is our market cap. But with BMO having over 1400 dealers in the US and Canada and JP Morgan having who knows how many, this anomaly should change over time.
As we all know the North Americans love all that is LARGE and therefore a 100,000,000 shares cap raising will be a distant memory in the weeks and months to come.
Regards
Danash
CPL Price at posting:
95.5¢ Sentiment: LT Buy Disclosure: Held
(20min delay)