Skeena Resources Ltd T.SKE

Getting a handle on dilution

[templetooth2]

Thanks to metalhead for posting that long youtube interview with Randy R. Note that it was recorded in early December. While RR says in video they have about 88 million outstanding, the fully-diluted number as of late January is 101.1 million.

At 1:44 of interview, RR converts $730 million Cdn capex to US$550 - $600 million. He says US$350 million of that will be a stream deal, leaving a balance of $100 - $125 million each in debt and equity components.

I will use US$125 million in targeted equity, conversion rate of $1.3 to get Cdn$162.5 million equity raise. Add a 6% underwriting commission and it's Cdn$172.25 million. Using an issue price of $5 Cdn per share, that's 34.45 million shares of dilution coming. You may choose a more optimistic price, but given the past offerings over the last 2 or so years, I think a $5 price is very realistic. (Stock closed today at $6.50).

So all in, about 135 or 136 million fully-diluted, fully-financed.

[metalhead666]

That would put SKE at 30% of NPV at the current gold price give or take. Not a screaming bargain but not expensive either. I'd expect a double of the share price this year getting SKE to 60% of NPV give or take.   I'd like to see a pullback to 20% of NPV again to load up once more. There's a lot that could go right and a lot that could go wrong given the state of the economy,