NORTHERN SUN MINING CORP LBEFF

Financing

[ExSudburyGuy2]

I'd say there's trouble when all the LBE "defenders" (pumpers) start slagging the naysayers who, rightly, point out the additional financing isn't a good thing. Name-calling is a defense of last resort. The fact is the financing does dilute the company, adding another 3.15 million shares to the float. There's more of a drain on Liberty's balance sheet -- having to pay out $2.5 million a year in interest. The arguments in favor are the same as always. It gives the company cash to expand. Well after all the financings (which were always rationalized for the same reason) in the past two years, this company hasn't expanded much. Seems to me it's been running on a treadmill, not getting anywhere. You notice Barrick Gold, a somewhat larger company that knows its finances, announced last week it was delaying its debt refinancing till the end of the year because it expects borrowing costs to decline. ``We know the treasury rate is coming down, and that's a good reason to wait,'' Chief Executive Officer Gregory Wilkins told Bloomberg. ``Credit spreads will come down with people getting more confident, so I think the debt-financing market will look better six to nine months from now.'' Personally, I think Wilkins makes a whole lot of sense there. Only reason for Liberty to go ahead with a $21 million financing now, paying a higher interest than my credit card charges, is because the company NEEDS the money. Production, and cash-generation, still doesn't seem to be anywhere near the schedule the company set out for itself 18 months ago. All that adds up to is just bad news. So, I'm with the nay-sayers on this one.