I am a new comer to ELM and unaware of the politics of ELM prior to this. However upon looking at the prospectus, capital raising appears justified. In light of the market conditions, ELM has raise enough money to bring the project into pre-feasibility stage and early construction phase (if 15% is taken into acccount). I believe the low SP of ELM of late, has already taken into account the capital raising.
Excerpt from the prespectus:-
Use Total Offering Sintoukola Project Seismic Survey (Kola plus step out). . ..... C$2.5 million Phase 2 Drilling (Kola plus step out) ...... C$8.2 million Resource Estimation (Kola plus step out)(1...C$0.7 million Pre-Feasibility Study(2) ....................C$13.1 million Contingency (10%). . . . . . . . . . . . . . C$ 2.5 million Further Studies(2) . . . . . . . . . . . . . C$11.4million Sub total . . . . . . . . . . . . . . . . . C$38.4 million General General Management and Corporate Expenditure C$8.0 million Capital Equipment . . . . . . . . . . .. . . C$ 2.4 million Sub total . . . . . . . . . . . . . . . . . C$10.4 million TOTAL. . . . . . . . . . . . . . . . . . . . C$48.8 million
In all I believe purchasing into ELM at current SP makes lots of sense. IMO I do not see much downside risk. I am glad that I can purchase into ELM at these prices.
For now, I think we should concentrate on what ELM has to deliver. Forget about the past, because all companies goes through a period of capital raising before they have enough funds to reach pre-feasibility stage.
So why don't we look at the important milestone coming up:
Completion of Seismic Survey . . . Q4, 2011(1) Completion of Phase 2 Drilling Programme . Q1, 2012 Completion of the Phase 2 Mineral Resource Estimation. . . . . . . . . . . . . . . . . Q1, 2012 Completion of a PFS-level Technical Report Q1, 2012
I believe each milestone will bring re-rating to ELM SP.
K2P Price at posting:
$1.37 Sentiment: Buy Disclosure: Held
