Why would CRE do this?????????Background: -
They have stated they have enough funds to support they company for the next 18 Months.
They have said they are in the process of getting a deal and feel strongly a deal will get done as the market remains strong.
Assumption:
It would be a good deal and it would boost the share price
So why would they do this?
To get an issue to accelerate value add activities - don't need too - they already have huge NPV.
To help some friends at a brokerage get rich? - seems iffy and doubtful
Because they don't have a deal and can't get one - so raise some money before it sinks to do somethings that will help them keep moving the dream along - very pessimistic response - but on first glance - this seems to be against what has been communicated in the past.
HELM did not exercise their warrants - which likely the company would have planned on to put some funds in the account.
Canaccord said hey - I have some instutiional interest and can put some funds into your account and get some instutional support for your project while you neg with the strategics.
Negatives
Put them in a position to have to do a raise at a low price
Puts deal in question - why do it if they were about to announce a deal
Positives:
Have cash to continue to move Phase 2 analysis forward - which is huge value demonstration.
Cash on hand for final negogiations with partner. "We can raise money if we need to - so no low ball offers"
Utilizing multiple parties- BMO, and Canaccord to expand retail investor awareness and process for further raises/coverage
Conclusion
Obviously not what the market was expecting and poor timing. Raises more questions thans answers. I think I would have been happier with a $25M raise to fully demonstrate the ability to have options.