My Thoughts My thoughts on the Lonmin deal and the situation as a whole:
~
Poor timing to be going out for money with the shareprice where it is. Very close to the 52-week low. Wallbridge must have indeed been fairly desperate for money. That being said, who knows what the current financing situation is for explorers in these unpredictable market conditions. WM wouldn't be the first company I've seen in the last six months that ended up financing near the low after being much higher before that; perhaps it tough to get any money. You can't blame Lonmin for being smart and opportunistic here ... Yoda, WM shares are a good deal for ANYONE right now who buys them ... not just Lonmin (they just happened to buy a lot more than the average joe). Fair value on DM and MII assets alone is around 17.5 cents (on a fully diluted share basis) ... so the company continues to be valued only marginally higher than just those two assets and the market is valuing all of the high potential Sudbury properties very low. I'm sure many on this board recognize the stock is not being valued properly and have taken advantage ... I feel it should be valued closer to 35 cents right now, but that doesn't mean I'm going to pay 35 cents ... I added at around 17 cents because it was trading a lot lower than I felt it should be. Buying at these levels is smart, and you can't blame the big boys (i.e. Lonmin) for doing the same thing many of us may be doing.
~
With this latest PP, the share count is indeed starting to get up there and that's never good, but in terms of dilution, over the past six months, close to 8.7 million warrants and 1.6 million options have expired so that balances things out a bit in terms of the share count creeping up. I put our fully diluted share count now around 167,136,000 (which includes the latest PP + the warrants), taking into account that 5.5 million warrants just expired in December (the exercise price was close to a dollar on those). Lonmin's stake in the company is now around 18.3% when you factor in the 10,800,000 shares they already owned from a past PP (assuming all warrants will be exercised).
~
Now, speaking of warrants, I did find it interesting that the warrants that came with this PP expire at the end of 2012 (so not far from now), at an exercise price of 40 cents. Hmmm ... it makes you think that Lonmin probably felt there was a chance WM could be above that level by year end. I would have to agree and I do think that 2012 will be the year the downtrend will be broken and things will start to turn around (it seems to have started already after bouncing hard off 15 cents). The fact that Lonmin did finance us is a vote of confidence for the company ... obviously they recognize the value that the market seems to be ignoring. On the other hand, with their large share in the company, if they were to take a shot at buying us out at a price way lower than our potential, it will now be much easier for them to secure the shares they would need in the event of a take-over. Hopefully that is a long way off as I do think the company has a long way to grow.
~
Lots of exciting drilling going on this year. I do think that perhaps the company is in a bit of an over-stretched state at the moment ... perhaps drilling in too many locations at once (now add in Nunavut properties... we have to invest money and work there to earn our stake from that deal). We don't have a lot of money and perhaps deferring some drilling to next year might be a better idea. Someone mentioned that WM is definitely an explorer as opposed to producer. For now, I agree, but I do think we are a lot closer to becoming a producer than some may think. In fact, I feel that this time next year we could be very close to going into production on Broken Hammer, which I have no doubt will become a mine. The cash flow from operating that small mine would then be able to fund drilling going forward (as others on this board have suggested). I'm very anxiously awaiting the new resource estimate on Broken Hammer and the results of the pre-feasibility study (which I believe is just a formality ... to be followed after by full feasibility study). I am hoping to see an updated resource by the end of Q1, and hopefully it will have some favourable surprises that will make up for the last, totally useless NR issued on the Broken Hammer bulk sample results in 2011(which actually contained no results).
~
One last note, which gets back to this latest PP ... when you are going to use a PP to raise captial as opposed to selling off DM shares, lack of promotion is going to hurt you. I do think this company is a solid company with a lot of potential, but they seem to do a very poor job at promoting it. If they asked for the trading halt yesterday, that was a good idea as it does bring attention to the stock, but we need to keep that attention up to help our share price, especially if more private placements are going to be needed this year. The share price has no business being this low and the story of WM needs to get out. In my opinion, lack of exposure is hurting us now and is probably a major cause for our poor share price performance.
~
Best of luck to all fellow WM shareholders ... as I said, I do think it will be a good year for us all and let's hope we get some good news soon.
~
Respectfully,
~
BUMBLEBEE