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Otso Gold Corp. V.OTSO

Otso Gold Corp is a gold mining company. The company's only segment being acquisition and exploration of gold resource properties. Geographically, it has a presence in the Americas and Europe.


TSXV:OTSO - Post by User

Post by blackgold14on Jun 02, 2021 4:23pm
242 Views
Post# 33312759

Strong Drill Results Should Lead to Higher Gold Production

Strong Drill Results Should Lead to Higher Gold ProductionThe recent drilling results are very strong.  There are a number of very long intersections returning substantially higher than expected grades.  Processing of this material by a restarted mine should lead to higher than expeced gold production at the planned output of 2 million tonnes a year. The company's corporate presentation targets annual gold production of 100,000 ounces at that planned output level.  We could see a lot higher annual production given these better than anticipated drilling results, perhaps as high as 120,000 ounces a year.  While I remain extremely disappointed in "management" doing the obscenely dilutive financing earlier this year, the stock is still a bargain at these levels.  Given how easily the stock price has appreciated in response to an upcoming announced restart, it was a monumental error to do a highly dilutive financing at 5 cents with just as many warrants exercisable at 5 cents.  They could have easily done a $1 million financing at 5 cents to fund the drilling program and then done the next financing to fund the restart at 8 cents and so on. Unfortunately, the highly dilutive financing does limit the upside potential of the stock in a big way.  Forget about getting a 20-30 bagger out of this deal even at annual production of 120,000 ounces.  Fully diliuted, there are close to a BILLION shares.  "Management destroyed future appreciation potential by doing the highly dilutive financing. Assuming gold remains at US$1,900, and a full year of production, the stock may rise to the 50 cent mark by the end of next year.    Too many shares is the only reason.   
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