GREY:DULMF - Post by User
Comment by
miningfundion Jan 22, 2014 7:55pm
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Post# 22123001
RE:RE:NEED for Finances? when does DM run out of $?
RE:RE:NEED for Finances? when does DM run out of $?Everyone knows that DM requires funds soon - the "going concern" note means that the auditors believe that it will be out of funds by September 30, 2014, and in the "outlook" section of the MDA, management specifically stated that DM will need to raise funds or dilute DM's interest in the project, which they will not do.
I cannot see DM raising more debt, so it will have to be some form of equity, which will be extremely dilutuve at these share price levels, particularly when typically the dealers will price the shares at a signficant discount e.g. $0.80 compared to today's $0.93. Investors are waiting for the penny to drop.
Therefore, I agree with Suomalainen that a rights issue would be the fairest solution to all shareholders (as opposed to a placement to a privileged group of insiders and friends). Ideally, the funds raised should pay off the expensive debt and fund the company through to the FS. The deeper the offering price discount, the more valuable the rights - generates some interest?