Warrants Like Tommy mentioned, I also have speculated and wondered for a while if it may be the case that someone may not want them exercised. Perhaps they never did, or their thinking/calculations could have changed in the last year and now they decided that they don’t.
Motive?
Obvious.
It would prevent share dilution by a third which would be a benefit to all of us shareholders, but more so for the largest shareholder—you know who.
Perhaps a year ago it may have made sense---promote the company heavily.. push the share price---get large stake holders to buy into the warrants so as to have that money right away to build out the mine and mill. Now it wouldn't make as much sense, since we would need money first, to mine soon, to drive the SP up to where the warrants would be exercised, at which point we wouldn't need all that extra money anyway. (the old catch 22 chicken and the egg story).
Method?
Easy.
· Proceed slowly with few announcements, news releases, or fanfare. Although its hard to know what to believe sometimes from the company, (remember “Ian Chang to provide frequent updates”.... the June presentation saying “mining and stockpiling 4th quarter 2017” etc. etc.) , they have said a lot of work has been ongoing. (roads, bridges, detailed planning/engineering, building an assay lab, work on tailings pond, employing 50 to 70 workers. (which , assuming its true, would likely have pacified the Fijian gov’t for now). For some reason they don’t want to talk about any of this.
· They hire Ian Chang and Kevin Li, experienced executives who did a lot to push Pretium forward to production, and you hear nothing more about them. (from all accounts they’re very capable, energetic, motivated guys, who, I would assume, are very motivated to turn their options into real wealth). (I doubt they were just hired to make a Euchre foursome with Mann and WB.)
· They have only one, maybe 2 drills going when they have the money and should have the moxie to have at least another one, if not 2 or three more going. (as of 2 weeks ago the underground one wasn’t drilling)
All of the above would keep the share price suppressed.
It has always seemed to me that they don’t need that warrant money to proceed anyway. As of 5 weeks ago, I was told they have 7 financing proposals that they’re looking at. The total CapEx isn’t that much, really. (and remember, at one point they were saying that the mill builders could finance at least part of that expense)
In CA money, Lions cash cost per oz is about $700, gold is at $1,600 so there's about $900 oz profit. The Capex is CA$58 million. so $58 mill divided by $900 is 64,000 oz gold. About a year's production or less. The website says 14 months payback on Capex. That's not that much money or time, and it seems like they should be able to borrow/finagle it fairly readily. So what if the financing is somewhat spendy, if its only for a short period of time it won't cost that much. Remember that they still have $23 million or so in the kitty and some of the work they've already done may have been in the original CapEx cost estimates. (Coffin kept talking about Rubicon which was a whole different mining and financing situation. They raised 12 times what LION needs)
All this is just speculation. Like Clark Griswald---just trying to find an explanation….
If this scenario, however, is true, then we may still need to wait a bit, although they might figure that they could soon do the financing, launch the mine, and assume they're safe from the possibility that the Share price isn’t going from $.50 to $1.35 by March.
Also, if true, this scenario could well be better for us owners of the company.
Perhaps......
· No 33% warrant dilution. (though maybe a lesser amount in the future at higher prices, a lot higher than the warrant price, to have the money to explore the rest of the Navilawa caldera)
· With the unpublicized work that they’ve done….The I’s are dotted, the T’s are crossed and its all ready for them to hit the ground running and rapid progress will be made toward mining, stockpiling and milling.
· They add another couple of drills and add many years of high grade gold mining to the existing plans. (a couple more years are already in hand, I think)
· LION ONE and Tuvatu finally become well known, and The blue skies, (that have never left), get Bluer still. !