RE: RE: RE: RE: MJS-V Looks good todayHi Elmo,
I appreciate your fully detailed response, and perhaps I wasn't as concise as I could have been, but my question was more directed to "whether" you had heard anything about this type of financing occuring with Majestic (I was thinking maybe something was mentioned at Cambridge House) - and was asking simply because I hadn't heard of the financing vehicle they were looking at - whether debt, bought, or a combo of both.
Certainly everyone should be using market cap for valuation - that is investing 101, so your overview is good for newbies and perhaps a refresher for some others. For me, with the way Majestic is generally valued, I will be happy with a MC of 50% the NPV at this point, considering the use of Inferred resources and the lower certainty of such (PEA, not PFS). When we get to the PFS, with increased certainty of reserves, I think we can look for valuations more in line with industry "standard" market valuations - so upwards of 1:1 NPV to market cap.
In my view, the next year we are looking at anywhere between a double and a quad. With any buyout, we are looking at more.
More to my question though. I know they are looking for financing. My thoughts were this:
-Perhaps they were going to do a 50/50, 60/40 or something bought/debt financing considering the current SP.
-My thought simply is that they likely don't want a 800M share monster out there (but again, it is all about MC, not Share structure or count).
-If they raised 40M though a debt instrument/bought combo, they have another 9M in warrants (sorry, can't remember the exact value off the top of my head this morning) next summer that would also be exercised.
All in all, the Co is very undervalued and will appreciate in the coming weeks, months. Today, a pullback looks like it will happen, based on German action this morning. We're sitting pretty, and whatever means majestic uses to obtain the required cash will really "solidify" Majesic's place as a "real" gold producer.
I look forward to that, but not necessarily to a 800M share Company.
B