Funding5 Sep 2025 06:08
Lets have a sensible discussion about cash and exploration companies.
Exploration companies do not generate cash - they spend it on a variety of necessary costs trying to find gold in our case and hopefully cooper as well.
They are therefore required to raise money and without assets to secure bank or other institutional financing or specialised financiers, unless they have established a JORC resource, then going to the market is normally the route - a placing.
GEO is a rare beast in that it potentially has another source in the Namibian licence -but the timing and certainty of any funds from this source is unsure, so we can discount that in the near term. If it happens then brilliant - but my guess is that would generate circa £1.5/ £3M tops as an initial payment - longer term revenue from that source would be an entirely different matter and depend on the JV agreement.
So back to placings - now again GEO is rare again because it has an inroad to a long term family fund via Omar and we have already seen that money has been raised in the past via this and other HNW holders - so yes there will be a discount - there always is, but I think there is a high degree of certainty that funds can be raised with relative ease - not all companies have that benefit.
So then we come to timings, amount raised and at what price relative to the SP - well that is calculation and judgement call that any company has to make. The share price will be in an even stronger position post successful assay results and given we are funded for the moment it makes sense to me to wait for those. If the results are as good or better than we had hoped for who knows what the impact on the SP will be, given the massive scale of the targets - 1 - 2 -3p - given Callum's history with GGP and the POG these numbers are not unrealistic and the challenge for investors will be to try and time their entry which is still under a forthcoming placing price - good luck with that one!
We have seen WSBN follow a similar path but here they didn't wait until the return of the assay results but there has certainly been lots of publicity and media on the cores - they have their reasons for doing so and maybe they didn't think their hand was maybe as Omar's - who knows.
How much will be raised? I'm guessing between £2 & £3M for phase 2 depending upon initial results. Lets face into the void and have some guesses - say £2.5M raised when the SP was 1p - at say a 20% discount (0.8p) - 312M shares issued representing 6.3% dilution. For context we went up 36% yesterday....
So - in short - raising funds is a requirement of an exploration company - we are in an almost unique position in terms of potential solutions. Price of gold is at an all time high and the market has fallen back in love again with the Australian gold story. Strong jurisdiction and the Juno project is being lead by the legend that is Callum Baxter. Its looking pretty damned good to me.
Have a great day.
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