RE: RE: RE: Punishing!!!!" Another reason for the price pressures for CRJ are 9 million warrants that expire at years end @1.75. So we are price capped for sure until then. Hope to see them expire because of the dilution and besides Claude at the moment has a very healthy treasury..."
I disagree (at least somewhat).
The warrants in question (6M at $1.75 that expire on 12/31) represent $10M in cash to CGR/CRJ. When you take into consideration that the Company seeks to undertake surface drills on Madsen in 2012, costs associated with drilling and resupplying Seabee and additional drills and studies to advance Amisk - that's at least $10M in cash burn. Going forward, and with CGR's obvious goal to place Amisk into production, they are going to need all the cash they can ascertain. Especially given that the private placement market just became that much tougher with the downturn in PM prices.
IMO, and what is serving as an overhang on the shares of CGR is the pending acquisition of SEM. With the shareholder meeting now set for January 17 and expected to be approved, we are looking at 9.5M to 11.4M additional shares in the public float (range being current outstanding to fully diluted at an exchange rate of .0789).
In my take, CGR was expecting the warrants would be in the money by year end where the downturn in PM prices and the subsequent decline in the stock price caught them off guard. In other words, they want that money. Hence, I would not be at all surprised if they did not extend the same. My hunch, however, is the we get a taste of the Madsen drill results by year end and or by January 17.
To close, I can not disagree that the warrants outstanding serves as an overhang but they are currently out of the money. The warrants in question, however, are not exactly cheap and represent significant cash amounts to the Company. Hence, I look at the SEM share exchange as the more weighted overhang. Even so, and if actions speak louder than words, then CGR no doubt seek place Amisk into production or else they wouldn't bother buying the same. Longer term, that's a good thing. But like you suggest, we have some additional shares coming to market that must be digested. In the short term, however, I think the pending Madsen drilling results present an excellent trading opportunity.