Post by
The300 on Dec 08, 2010 10:58am
Financing Thoughts
I have no doubt that there are mixed emotions from investors regarding this financing. The first knee-jerk reaction tends to be ``This financing was done too cheap`` or ``it`s a sweetheart deal``. Well ...those individuals would be right. It is cheap and it is a sweetheart deal and it is the best piece of news that we have seen thus far.
If this were a regular financing done by any of the run of the mill brokerages I would be thinking:
1. they got themselves a great deal;
2. I wish they had done the financing at a higher price
Now let me address both those points.
1. They got themselves a great deal
This is absolutely a great deal. Why? Apart from all the great things that Halo has going for it (see my last post), it would have been impossible to establish a position of this size in the open market without taking the stock to well over $1.00 (not to mention the warrant). OK, so it`s a great deal for the financer. But what about the Halo shareholder?
Answer: We got ourselves a great deal
As I stated earlier, this is not a financing done by a run of the mill brokerage firm. The money is being invested by Hudbay, a major, and our strategic partner in the Sherridon land package. The significance of this financing is that we now have indisputable evidence that Halo is going into production. Hudbay would not be making this commiment to Halo if they were not going into production. We know that Hudbay is looking for new sources of feed for their mill as they are quickly depleting their current reserves. We now know that the joint ventured piece of land is economically feasible through open pit mining (as per the NI 43-101) which means we will be going into production very soon as there is no major infrastructure required for open pit mining.
2. I wish they had done the financing at a higher price
As shareholders, you always want maximum value for your investment, however, this is not the way the game is played when it comes to financing. Those with the money are always in control. In order to secure financing, the financee always has to give something up which is typically giving a discount to market and providing additional incentive through a warrant. I have been involved in enough of these transactions to know that is just the way its done.
I have to imagine that a financing by Hudbay has to put Halo on more radar screens. With the financing out of the way, I believe that we continue to move up from here based on the antiicpation of future production. i foresee a slow and stready climb in the shareprice, but that is the way i prefer it. it will come down to patient and belng comfortable with your investment for the longer haul. I have done my due diligience here and I am content to watch this play out over the next few months.
Conclusion: Halo is cashed up and is going into production
Comment by
sweenby on Dec 08, 2010 2:26pm
It is always in hudbays favor so what is going to take halo higher. The property is a gift to them if this keeps up. glta