How much dilution?Some of you have referred to a ten percent dilution. As far as I know there are around 120,000,000 shares out, 145,000,000, give or take, fully diluted. If we add in the max from this offering, 24,000,000, and a like amount of warrants (assuming they can ever get their stock price to recover to the point where someone would want to pay
.40 for a share), we are adding 48,000,000 shares. So this represents about a thirty-three percent potential dilution for 24,000,000 X
.25 = $6,000,000, plus 24,000,000 X
.4 = $9,600,000 for the warrant conversion. These new shares will represent about a quarter of the total, fully diluted, after the offering.
I am very disappointed that they are giving away so much for so little. This puts a cap on future stock price increases. I realize that, as the company told me, they are in arrears to Silver Wheaton. But if the debentures were selling well, wouldn't they just offer a few more of those to raise the relatively small amount of money they need? This suggests that they are having a hard time selling these instruments. That's too bad, because it seemed like such a brilliant move. It's only brilliant if there are buyers.
I will hang on to my shares. Some day we are likely to get back to at least
.40. My dream of $2.00 again seems like a lot of wishful thinking, however.