They've said that they will have $10MM in the treasury at year end, if the ~$15MM worth of warrants get exercised - which they have said they expect to happen - that will put the cash level at $25MM by February. In addition to that, the company has stated that they intend to complete a financing, if I remember correctly, within 6-9 months.
The reason that they were able to get through 2008 easily is because they were fortunate to have raised money before the financial crisis really got underway. The company is inclined to raise money when it is readily available. There is a chance that we are in the eye of the storm and that there could be another down leg in the economy and in the markets. While that would probably be good for the gold price, it may mean another dry spell in the capital markets.
While I am no fan of dilution, I would like to see the company be able to maintain the pace that it has set for as long as necessary, which will require lots of money. I've been involved in enough pre-revenue companies to understand the value of taking money when it is offered and also the consequences of not doing so. For example, at the height of the tech boom, the CEO of one company blew a $40MM venture capital financing because he wanted to hold out for "the big money". Twelve months later, the boom had busted, no capital had been raised, shareholders were wiped out and everyone had to look for other jobs. Not saying that could happen here, it is an extreme example but one that has stayed with me. As long as the company is smart about getting the money on the right terms from the right sources - strategic capital with a long-term perspective - I would be okay with that.
There are several sets of assays that will be coming out over the next few months, I have to think that we will see at least a couple of those before any deals get done.
Also, while it can be discouraging to see the share price under pressure while gold stays near record highs, it is representative of what I am seeing among most of the juniors. But this is not a permanent condition. We have one of the best teams in the business, imo, a combination of geological, management and financial expertise, all of which are critical long-term success factors. We have one of the most exciting discoveries in years in the US, an exploration program that is in hyperdrive and a company that understands the importance of communicating their story clearly to the market. While we all want to see our stocks rise daily, that just isn't possible. So during times like these it is important to remember what you own and why you bought it. That's how I see it, anyway.
Hope everyone has a great weekend!
