Given the VWAP over the last couple of weeks me thinks it's likely that the retail component of the CR will fall short when it closes at the end of this week.
No surprises there, however I am still confident that the shortfall will be taken up in full up via Plan B i.e. instos that have indicated their desire for more than their allocation & potentially some new investors that Steve P. mentioned since the ann.
IMO management did the right thing by offering retail shareholders a rare & equal opportunity (off market) to support the company, but in the current depressed environment a Plan B was always going to be required IMO.
I agree that chart technicals ATM suggest further weakness in the short term (we might get a further dip down to 5c or so), but I expect the SP to recover somewhat after the CR is finalised.
The rationale behind this view is that I believe that IDC will one way or the other (as I said most likely via Plan B) be able to secure the cash they require. Should the full amount of approx. $25m be raised, this would easily be the single largest amount the company has raised since its commencement on the ASX. One would then expect this feat (should it come to pass) to quelle any short/medium term solvency based fears & in turn provide greater confidence to the market. I especially refer to the many 'pundits' out there who, it seems, have forever been voicing their concerns about IDC going belly up due to a consistently cash poor balance sheet. Their view was always without foundation IMO as their due diligence failed to include the fact that it was always the company's intended strategy to seek minimal CRs up to this point.
As for the significant SP dilution caused by the current CR, am really not that concerned as a long term holder. Why? Dilution is unfortunately a necessary consequence of a miner's exploration & development phase (outright debt being the only other alternative as a means to continue operations) however as long as IDC continue to grow their asset & deliver in proportion to their expenditure program, then I'll continue to remain a happy camper. What's far more important at this moment (IMO) is that IDC use the cash as proposed to deliver on their next objectives i.e. to prove up an additional 500koz at 10g/t by mid 2014 and secure a mining lease during H214.
And Aman2, if I can seriously answer your question (with no grey inferences) 'what attracts you guys to this company?' Can I add that apart from the obvious high grade discoveries of 2013 that have added some 500koz at 10g/t to the resource equation with a plan to double this in less than nine months from now, another reason why I like IDC (especially as an extreme leverage play to the future POG) is because IMO management have developed an excellent track record in delivering on what they set out to achieve, and have in the process positioned the company well to accelerate the development of Mt. Kare following partnership anns. with some of SE Asia's best.
So IF Burgess, Promnitz, Niumataiwalu et al are able to continue their success by delivering the company's next objectives on time, then I believe the <$100m project financing (est.) will be secured without significant delay & at that point we should see our favourite horse sprinting towards high grade / low cost production, as planned.
In summary, I know it can be difficult at this point to ignore the doomsayers & the gradual drift down in the SP to date, but IMO the underlying fundamentals of this company remain in place (albeit with an increasing divergence to sentiment & SP), and in fact continue to improve. Speaking of divergence, it is my belief that something's gotta give in this Mexican type standoff between price and fundamentals and I'm confident that fundamentals will be the last man standing, so to speak. I wish I could predict when but in the meantime I continue to buy the dips based on the existing facts, seek fundamental truths that may influence my perception and if all's well continue to debate the non-believers with rational and cautious exuberance.
Good luck whatever your position.
Note: my opinions are mine only and in no way am I offering advice of any kind. Please DYOR.
IDC Price at posting:
6.0¢ Sentiment: LT Buy Disclosure: Held
