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Tamerlane Ventures Inc. V.TAM



TSXV:TAM - Post by User

Comment by LoserLoserLoseron Sep 21, 2011 6:46pm
200 Views
Post# 19068851

RE: RE: RE: Update Mining

RE: RE: RE: Update MiningProject FinancingThe project financing work is proceeding and the Company continues to solicit more proposals for funding the project. The major hurdle to closing any funding is the current share price. To this end, the Company will be putting a significant amount of effort towards introducing the project to potential new shareholders.===============I think it is obvious that TAM cant get debt 160M or 80M$ financing if the market capitalization stays at 15M$. If the share price goes even lower (lets say 6M$ market cap as it was in 2008) then the probability of bank loan is equal zero. I think to get debt financing Tam needs market cap more than 50M$.But the funniest conclusion (theoretically) about it is that if they get bank loan then share price will rise in one day to 1$ exhibiting positive feedback loop. If they dont get debt financing then negative feedback loop will crash down share price to 6M market cap. So this is the question of belief in project from the side of bank. If bank give money then bank will make profit if the zinc prices stays around 1 US/lb in the next 3 years. Of course for bank it is risky right now to do so because in the case of worldwide recession zinc price will fall down to 0.5US/lb as it was in 2008 and Tam project will be not profitable and company would go insolvent. But when china economy will grow as yet then debt financing is possible. Now i give 10% probability that Tam is capable to get bank loan in this bad market environment. If we were in 2007 Tams share price would be 2 CAD but now in crisis when banks are not lending we have share price only 0.2 CAD. And that is NORMAL. And that is not management fault. Many companies can not attract international investors, because nobody knows how will play out commodity prices in 2-3 years.
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