G's 2009 mistake & Debenture dilution discounted in SPThe following are extracts from LSG's 2009 Annual Report. The following points seem to be relevant:-
- G sold Bell Creek for a MV over about $23m (when the LSG SP was over $4). G's managment now seem to be rumoured to want buy back Bell Creek and LSG's other properties pay a current market price for Bell Creek, which it sold at a give away price in 2009. Tony would have negotiated the purchase and may therefor ehave more detailed knowlege than the current G management.
- Considering that LSG raised capital at $4.43 a share to fund the mine development, then even if all the LSG debentures were converted (which would simultaneously eliminate debt), the dilutive effect may be minimal, especially since it is already discounted in the SP from $4.43 down to $1.34!
Acquisition of Bell Creek West block of properties from Goldcorp On December 17, 2009, the Company acquired from Goldcorp Canada Ltd. and Goldcorp Inc. (together “Goldcorp”) approximately 28 square kilometres of prospective exploration property in the surrounding vicinity of the Company’s 100% owned Bell Creek property for $15 million cash and 1.59 million shares of Lake Shore Gold. The properties, which range from a project with historic resources, the Marlhill Mine, to early stage exploration targets, are all located along the New Mine Trend, host of the Porcupine Joint Venture’s (“JV”) Hoyle Pond Mine and Pamour operations
Building a balance sheet to fund the Company’s growth plans In 2009 the Company raised gross proceeds of $153.8 million through private placements and a public offering. A total of $93.0 million of this amount was raised in the fourth quarter of 2009. Of this amount, $85.0 million was raised through a private placement transaction with Hochschild Mining Holdings Ltd. (“Hochschild”), involving the sale of 19.2 million shares at a price of $4.43 per share. An additional $8.0 million was raised through the sale of 1.4 million structured flow-through shares, representing the first tranche of a structured flow-through financing involving the issuance of approximately 2.7 million shares for gross proceeds of $15.6 million. The second tranche, for gross proceeds of $7.6 million closed on February 16, 2010