RE:RE:Yes wileycyteLooks like now "hopers" and "believers" are expecting a "miracle".
A rights offering means "game over".
As per the rights offering: "offering (the “Rights Offering”) of rights (“Rights”) to acquire units of Red Eagle Mining (a “Unit”) for gross proceeds of up to approximately C $46 million".
46 Million!?!?!?!?!
And as stated in the press release: "Use of proceeds from the Rights Offering is for underground development (US $10 million), paste back fill plant (US $3 million), underground delineation drilling (US $2 million) and working capital". There are only 15 million needed.
What is the difference for ?? What else is the management covering up? double the amount needed for the mine upgrade doesn't account for contingency, or does it? What else is to be paid, what is the total negative cash flow and debt of the company adding up? I'm definitely interested in seeing the finantial for Q2. It is going to be a big surprise for all. I hope they complete some of the rights offering, otherwise, if the storm that is approaching in those finantials sees the light before the rights offering is completed, not a single investor would put a cent in this company. Again, time will tell.
On the technical side, paste back fill increases dramatically the cost per ounce, and I'm also a non-believer nor hoper that gold is going to be up that much to increase the profitability of the operation to minimize the impact of it, so this is becaming a marginal mine operation, and soon conditions can change it to a non-economic operation. Until they start testing it, nobody will know, but I'm sure we can ask those questions to professionals out there, not necessarily management, and easy to figure out that what is to be attempted here, may not work, and what is more important, if there is no closing of the offering, or in a short period of time, the mine may go from temporary closure, to permanent closure, to foreclosure.
Massive dilution for shareholders, no return of investment costs, and poor management are what we are learning from it. Just a great promotion story.