Private PlacementCandente, with some veterans in the copper business at the management, is not as confident about the copper price as other. This would be the best deal, which one can put together under two conditions. 1. The company believes that good news is coming. 2. They are not confident about the copper price six months from now.
Essentially, this deal put a cap on the stock at 1.65, unless there is extraordinary good news. But, if there is good news, the new finance will be done automatically in 30 days, as the term indicated here. This structure of financing encourage hedging at 100%. Unless there is some real good news coming down the pipe, I do not see the real benefit of doing it this way. On top of that, to all the current shareholders, let me tell you, this deal basically killed any possibility for Candente to do any financing below 1.65 within next 12 months, unless they want to burn the bridge.
They will end up with 6.22 million dollars, when it is all done, if they have some really good news coming down the pipe. I just have a feeling, the good news is not from the copper side. The good news might come from the possibility of them selling the Zinc property.
I think that they need money, at least 30 millions soon, if they want to take the advantage of the current market condition.