American Bonanza Gold Corp ABGFF

Not so bad...

[rotten2core]

In a perfect world, avoiding this dillution would be better.  But hey, the stock is trading at .05 and they are damn close to starting to make money.  Finance markets are tight and the interest on these loans is through the roof.  SUG and BZA management are very tight.  They are friends and in some cases, the very same people.  There is a definite synergy here.  SUG needs to drill something and their sitting on a few Million $, BZA needs cash and they have a little land to spare.  Good deal for both sides.
Now as far as the proposed 200M units of .05 shares and 100M, .08 warrants.  The shares will net them $10M (interest free)+ SUGs $1M for the debs(12% interest not bad).  So now they have $11M in the coffers.  No chance of going ***** up while being oh so close to being in the money; They make their friends alot of money on the conversion of the debs, the market hates the idea driving the SP down further in the short term giving these guys the perfect opportunity to add more or issue ultra cheap options to themselves.  Their thinking Win/Win/Win!!

Now as far as shareholders go, I think there is A LOT of money to be made getting in at these prices.  So they'll have what 575M shares on issue.  Once they get up to design capacity (2013), they'll be funding with free cashflow.  But, they NEED to make sure they get there.  they need equipment, pay loans, expand, etc.  The worst thing that could happen is they run out of money.  I'm estimating annual net earnings to be in the $17M-$19M range.  So lets throw a 10X multpiple on that, and your looking at a ~$180M Market Cap.  Were currently sitting at what? $10.5M.  $180M/575M shares = .31/share.  A 7 bagger from here!  Not bad!  Plus they'll funding further exploration and aquisitions with free cashflow and should need to go back to the market.  Cheer up fellas.  If you're way underwater, average down!  Good days ahead.