Visions of the futureHey folks, this was a big week for Dianor. We navigated a major hurdle and emerged intact. Frankly, I'm very pleased that the SP held as well as it did. Let's hope Bish is correct and the next few weeks bring some relief from the "oppression" .
Now, let's think about the future...
Assuming Kodiak advances Dianor the full $500000, our cost for this $ is approximately 6.7 million shares. Then suppose we get $10 million from Third Eye for a cost of 3.8 million shares and 34 million 10 cent warrants ($3.4million more to the kitty).
That gives us $13.9 million for an output of 44.5 million shares and an interest rate of 12% on the $10million loan. (I'm guessing that at leat $5 million of this goes to current obligations and the rest is for the bulk). Let's hope this leads to the commisioning of our DMS plant and - along with some intensive bush beating by Run DMC (RMG) - a resulting bump in share price to let's say 30 cents. We then engage Kodiak in a series of draw downs in that range for proceeds of $20 million. This will cost us about 67 million shares.
So, by the time we get the bulk sampling done our float will be around 320 million shares. However, we will also have shares from Newco, know the potential of Quebec and have results from the bulk sample (I'm guessing Ryder is digging where he know there be sparklies). We may have even significantly reduced the GOR owing to JL.
This, assuming positive results from the Incredible Bulk ("Don't make me angry" (Bill Bixby for CEO, Lou Ferrigno for CFO???)), sets us up for a JV or takeover whilst trading at a dollar. I'm more inclined to guess it'll be a JV. We then do an offering of 200 million shares for proceeds of $200 million to cover our share of the JV costs of the biggest open pit mine north of Chihuahua. That leaves us with 550 million shares on the day of first big picture production in, say, 2015.
Supposing this mammoth mine processes 40,000 TPD (keep in mind that this would be a ridiculously huge mine) at a profit of $15 per ton for 320 days a year of which we retain 50% (part of the hypothetical JV agreement Barbara Eden has brokered). This leaves Dianor with earnings of 19.2 cents per year.
At a PE of 10 that gives us a SP if $1.92. To that I would add a premium of around $1 for a mine with a virtually limitless lifespan and you get a best case considered SP in 2016 of $3.00.
Sound reasonable? If not, tell me where I've messed up.
Have a great evening
Walden