RE:RE:RE:RE:Curiouserblue0987 wrote: No one except perhaps those that are short in this stock likes dilution, and I'm certainly not happy about the share price offering, but sitting back and hoping for an early take-out that may not happen vs fast-tracking her into production, I prefer the latter. With Skeena looking to be a high margin cash cow producing between 400k-500K AuEq per/year, if in production today would generate a market cap 3x-4x times that of today's market cap. When looking at the overall picture, this 8% increase in dilution with this latest raise is negligible, and if taken-out early all expenses would be factored in.
Blue,
Agreed with your assessment. At least, Walter Coles (an excellent negotiator) has indicated his intention to plough ahead with the development of the mine at Eskay Creek with 100% or 40% of SNIP. So, SNIP would be part of the main mine, and it would be more economical to process SNIP ores at Eskay rather than operate SNIP as an independent operation by Rochschild (60% of SNIP, if option exercised). Bet that both sides have discussed all the options (before Oct 2021). They will work out some kind of a deal. During the meantime, SKE will complete the shor "un-paved" section of road from SNIP to Eskay with an extra $50M+ in the kitty. With this cash surplus, SKE could start some improvement of the existing (brown field) facility such as tailing ponds, etc...They could even do some pre-stripping at Eskay.
Presumably, Barrick is watching this like a hawk, since 10.8% ownership does not give it a strangle-hold on SKE (SKE has quite a few major shareholders/major mining companies around who would be willing to provide the required financing for the CapEx. According to the 2019 PEA, depending on the PoG assumed,it would take about 1 yr (at 1500/ozAu) to payback the CapEx of US$ 233M. The upgraded PEA with Tier 1 input values would be expected to be better. Barrick would need to be vigilant. If SKE decides to go for equity/debt for its CapEx, e.g. 30% equity/70% debt, even 20% equity/80% debt, Barrick's 10.8% would be no match for a 20%, or 30% from another major... unless Barrick wants to start a bidding war...
You snooze you lose...just imo.
GH11