the d word

Dilution

Market perception
The price per share pre CR is $0.057=MC/352,MC=$20 million.
After the CR of $11M (220M shares)we can expect the price per share to be (MC+11)/572=(20+11)/572=$0.054, in the absence of any other news.

Shareholder perception
Individual shareholders may have a perceived future BSR value V that is much bigger than that of the general market. The addition of 220 million shares however dilutes that value by 100 V(1/352-1/572)/(V/352) = 38%, ie down to 62% of their former expectation.(Note, without the CR it would have been worse)

On the upside, new drill results and the expected resource upgrade may increase that value and BSR's share price.

On the other hand, the probable testing of new sub AUD1600 lows by the POG and the effect of the US summer season on the share market will drag all gold stock prices lower.

Overall I think we may see sub 0.05 prices over the next few months, buying opportunities. My long term expectation for BSR is high.