RE: WT.""C"Clint,
thats a good point, that does seem to be a high level of dilution, but really its only 5% depending on structure by then.
If you think this adds 217 Million to the sharebase you are not getting the 10:1 warrant to share exchange rate.
Currently there are ~390 Million shares, and 217M of the B class Warrants, but this will only translate into ~22M shares added, so ~5% dilution
Its highly likely that more M&A activity will occur inside the next 2 years that would only bring that ratio down.
Not too mention should that not happen, while yes the stock will be a bit "sticky" through that range as the sharebase and price rebalance, Since MKT CAPS are valued based on cash flows, and cash flows are based on margins, 5% is not really that great a margin increase "to power it through" to be lookling at for NGD, especially since the company is currently valued by the market assuming about a 500$ US margin.
Add a mere 30-40% to this margin, and you have a $700 margin. THATS WHERE GOLD IS NOW!!!!
IF the margin were to double to 1000 by 2012, on production of 500,000 oz @ a PE = 20, this is a 10 BLN mkt cap, or in other words, with both the C & B dilution of another 30M shares, 24 bucks !!!
The other angle here is that at a nice price point like 15, NGD will likely not mind the dilution, as this represents FREE FINANCING without the usually rip job 8-15% the brokers and banks charge to raise money. 22M x $15 is a nice chunk of change at ~300 $M, that they would most likely put to work with further growth and M&A work.
So No, the effect of dilution of the B& C warrants is NOT really a big factor here!