Royal Nickel Corp. RNKLF

RE:This Company will Need to issue some more Private Placements

[pierreg]

The following points will limit dilution:
-Shares outstanding as per the RNX Short Form Prospectus April 1st 2019 and if and when, the purchase agreement option is exercised. «503,921,478 assuming full exercise of the Over Allotment Option. In the event that the Company exercises the Higginsville Purchase Option, such decision expected to be made by the Company by May 7, 2019. To a portion of the A$25 million cash component of the Higginsville purchase price 10 M$ CAD» @lexcon wrote on April 2nd «The prospectus shows $10m (cad) of the PP deal earmarked for the purchase of the mill if option is exercised, so that implies they expect to be able to fund the remaining $15m AUD of the cash portion from the mine/milling production in the 70 day window. » If so, 25 M$ AUD in cash will be fulfilled. Remaining 21 M$ worth of RNX shares at minimum price of $0.49 per share = $19,900,451 CAD or 40,613,165 shares and if shares outstanding as per https://web.tmxmoney.com/quote.php?qm_symbol=RNX 497,797,912 shares + 40,613,165 = 538,411,077 shares. Fully diluted 551,051,792 shares as per https://ceo.ca/@pierreg01599501?81999a2516b5 + 40,613,165 = 591,664,957 shares.
-The company and its initial public offering was December 9th 2010, roughly 8 years and 5 months ago and 19,500,00 shares were issued at the time. If the purchase option gets fulfilled, the following private placements are included above: the recent one with 28,163,500 shares with over-allotment closing in April and 19,891,165 PP shares which closed January 18th 2019;
-BarristerIII and his conversation with Russell Starr an advisor to the company as per https://ceo.ca/@pierreg01599501?c768efacb0de «He also insists this latest PP "isn't dilutive"--seemingly meaning that the Higginsville assets are net accretive. Didn't 100% commit to no new stock sales, but anticipates that once that deal closes, they'll likely use debt for further financing. »;
-Production if the mill option is exercised: «Beta Hunt (RNC expects that processing cost savings would be in excess of C$15 per tonne, or a 35% reduction), and add an expected 40-45 koz of gold production in 2019. […] "The timing of this transaction is helpful as our drilling program has sufficiently advanced to allow for commencement of a limited restart of bulk mining in areas with mine development already in place. »; https://ceo.ca/@newswire/rnc-minerals-announces-purchase-option-agreement-for
-Small scale production is ongoing and will generate revenue.

Also, is a larger float worrisome? I disagree as RNX has comparatively fewer outstanding shares at 497,797,912 than ABX 1,751,516,088 or AAPL 4,715,280,000. Has it limited their growth? @Huntore March 22nd 2019: «How about facts opposed to thoughts - Researchers at the Stern School of Business at NYU and Emory University looked at more than 40 years of data, from 1962 to 2001, and found that of the 1,600 reverse stock splits, shares underperformed their non-split peers by 15.6% in the first year following the split, 36% in the second year and 54% in the third year. Draw your own conclusions. »
@Huntore April 20th 2019: «I prefer that they forego any reverse-splits or buybacks and grow this company the old fashioned way. Start with getting the mining operation up to full production and putting up profit numbers on a consistent basis. Let the company grow into the share float. Relying on profits rather than increasing debt levels or further dilution is the best option presently in my opinion. What will I be watching for? RNXs’ most-important fundamental data for us as investors, the all-in sustaining costs per ounce mined. AISCs include all direct cash costs, but then add on everything else that is necessary to maintain and replenish operations at current gold-production levels. These additional expenses include exploration for new gold to mine to replace depleting deposits, mine-development and construction expenses. They also include the corporate-level administration expenses necessary to oversee the mines. All-in sustaining costs are the most-important gold-mining cost metric by far for investors, revealing gold miners’ true operating profitability; which will directly drive profitability which ultimately determines stock prices. I believe that investors look for production growth above everything else, as it is linked to company growth. I am assuming that the mine manager will want to sequence processing to ensure that higher-grade ores are fed into the mill in Q3, yielding more ounces produced despite fixed mill throughputs. Why? They seem to like to process their higher-grade ores in Q3s when bonus calculations are on the horizon, and their lower-grade ores in Q1s when year-ends are far away. Will RNXs’ up-coming ore production report in Mid-May reflect the true production possibilities for the entire year of 2019? This will be answered in the spring of 2020. I realize that there is a developing consensus on this board to do something about the size of the float and that my stance seems to be out of sync. I believe at this early stage of direction change and development the company needs to prove the resource and that it can be mined at a consistent profit. »