Taylor Dart comments (see below article) “The original cash balance (+) cash flow was enough for covering the US$200 million in capex (exploration, growth, sustaining) from 2022-to 2024 at the high end of estimates. If you cut growth capital in half in 2023/2024 due to no need to do final expansion of mill, you're still looking at ~US$150+ million in capex spend in 2022-2024. All they did was finance to cover most of Lakewood, I don't think the dilution is unreasonable at all and given their history of willingness to do share buybacks, they'll likely offset most of the shares anyways in late 2023/2024 with buybacks. It would have been very tight without financing, and it's always better to have more cash than have to go to market later.
See SilverCrest which raised at decent prices and built-in a big contingency and provided room to keep spending on drilling during construction vs. Pure Gold/Argonaut which didn't think ahead and had to raise at consecutively lower prices.”
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“Grades are less important when you have the benefit of nickel by-product credits and a mine with relatively large stope sizes and this much mine development ahead of it (operated for nearly 20 years by WMC starting in 1974), with the decline extended south through the AIF to access the Beta Nickel deposit, and another 5 years by Reliance (2003-2008), before moving into the hands of Salt Lake, which RNC Minerals acquired, which then changed its name to Karora.
When a deposit has been mined for 30+ years, there's extensive development ahead to benefit from that helps reduce mining costs, with mining costs of barely $25/tonne vs. costs above $60/tonne at several other mines elsewhere in the sector. If you do superficial analysis, you come up with mediocre results, which is why you're long FSM and riding a massive loser instead of sitting in what's been a solid winner since Q4 2019: Karora.”