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Bullboard - Stock Discussion Forum American Bonanza Gold Corp ABGFF

GREY:ABGFF - Post Discussion

American Bonanza Gold Corp > ??? Good news and bad news....
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Post by bizwiz on Jun 21, 2013 2:58pm

??? Good news and bad news....

Listen; after reading the following news release https://www.stockhouse.com/companies/stories/t.bza/8908923 I came to the understanding that the mine is certainly up and running producing what it should ,which is gold, even if the production is below target.

With regards to the revenue stream which will increase with time I'm puzzled by the proxy release I received at home which asks us to vote on increasing the number of shares in ciurculation by the issuance of the packages junior explorers typically release which are shares and warrents for chicken feed which in this case , for a mine in operation, is 10 cents ...

I'm just wondering if it would be wiser to wait and count on ever increasing production to assuring the payment of outstanding expenditures with regards to ongoing operations and debt instead of issuing a large number of additional shares at a paltry price which has the additional disadvantage of further diluting shareholder ownership position of equity so much that the current shareholders which have a solid stake in this corporation may feel shortchanged without mention of what having many more shares in circulation produces in terms of the weight of each individual share which further prevents a run-up...

I'm actually wondering if we'll end up with a producer with 500 million shares outstanding which just can't get the price of it's equity to go beyond a nominal value despite what such issuance of equity can be used towards once considering institutional investors looking for a stake in the operations without risking an initial run-up in price, the credibilkity of such institutional investors being the insurance policy assuring sufficient confidence to support the value of the equity ...

Despite the assurance given by institutional investment, the bargain some people may get may leave others a little sour once considering the initial investment costs and subsequent dilution of shareholder equity which is far form assuring a subsequent returnb on investment which is decent...

Comment by luker222 on Jun 21, 2013 3:38pm
This post has been removed in accordance with Community Policy
Comment by Leafs007 on Jun 27, 2013 3:56pm
Agreed on all counts.  The obvious answer to why company is planning to massively dilute the company is:  MANAGEMENT DOES NOT CARE ABOUT SHAREHOLDERS AND IT's SP.  It should seek for loans from somewhere.... I should have gotten out when I had the chance! *Sigh!*
Comment by bizwiz on Jul 01, 2013 6:07pm
It just seems so aberrant to so drastically dilute the shareholder ownership position of current shareholders when they are producing and are expected to sufficiently produce to be able to pay outstanding debts that I'm wondering if such a measure has another purpose than to assure a paltry inflow of capital. Mind you, while they may have added such a measure to be prepared once there is an ...more  
Comment by bizwiz on Jul 01, 2013 6:10pm
Mind you, foir those that are curious, I'm active at the following site... https://sites.google.com/site/rustybiker/urban-claustorphobia
Comment by bizwiz on Jul 05, 2013 3:20pm
Despite the drop in price for gold and what could theoretically be lower recoveries, I'm still optimistic knowing that their older reports (based on a price for gold which was just a fraction of the current price) gave promising expectations . I just hope the mill feed is ground finely enough to give the best recovery rates !  As for my current investigative quests into other projectys ...more  
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