RE: Facts - You Decide4 Feb 2021 10:43
"placing shortly after pump"
The value we are getting from the placings is 6 times better than what we got from Bergen (though they were a necessity at the time). Exploration requires funds. So all pre revenue companies will require funding for ongoing operations. As long as those operations add value (through adding value to mineral resources by confirming those resources in the case of junior miners) then they are do not cost share holder value. Alternatives are disposal of proven assets (or part disposal), development and production to create revenue streams. Placings to fund overheads only are however dilutive. Alba have been productive with the funds they have recently raised. I've asked for budgets for exploration at each project and a projection of income stream from HH. The reason I have asked for this information is to estimate the funds required. Bear in mind that there are two classes of warrants expiring this year, one class at exercise price of 0.42p at the end of March. As long as the SP is well above that then, that should provide a cash injection (about £600k by the end of March). No doubt the newflow will be timed to best effect. It may also be the case that contractors may accept part payment in shares. Now, if you were a drilling contractor being instructed to drill into an orebody or take a bulk sample from an ore body where there is visible gold, then you might well be tempted to accept part payment in warrants or discounted shares.
If the SP at the end of March is below 0.42p, then of course, I'd expect the need for more conventional placing(s). The higher the SP is, the less dilutive is the effect.
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