OTCQX:QEXGF - Post by User
Comment by
Inept1on Mar 25, 2021 2:21pm
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Post# 32876673
RE:RE:RE:News
RE:RE:RE:Newsjfan22 wrote: I can't believe it. Not only was a totally wrong about the size and value of this deal, I actually really like it. The dilution is still a bit uncomfortable, but since there weren't options/warrants the overall dilution is pretty similar to what I was hoping for. Not only am I not done with the company, I am excited and will probably increase my position.
Assuming it gets fully subscribed, it represents a dilution of nearly 31.5% at an average unit price of $0.72/share. If they blow through all the funds and get $0 of value from that work, the share price would go down to $0.47 (assuming MC of $16.7M, same as pre PP). That implies downside risk of ~33% from today. Not bad at all! Especially great is the fact that there were no sweeteners!
But by far the best part of this deal is bringing on Skeena and "an investor group" led by Adam Lundin. Skeena has probably my favourite management team of any junior right now (and they get a board seat!) and Adam Lundin certainly knows what he's doing. Bringing these folks on lends a ridiculous amount of credibility to QEX's management team and their technical abilities.
To have Newmont, Skeena and an Adam Lundin led group of investors backing this company has value that cannot be overstated. The deal did dilute shareholders, but it was disciplined and didn't give away the house. I was wrong to doubt the QEX team. What a phenomenal job they did putting this together!
Dilution has to happen one way or another. I like the flow through shares and no warrants. In general I'm usually not very happy with the timing and terms of private placements, but this looks good to me.