RE:RE:why is KRR selling off so muchPeterThomas wrote: The Company said they would fund the 200K production target from internal income, now they are diluting like hell and taking on more debt. Lying does not promote the share price.
They did not lie, they WILL be able to pay for the ramp and the upgrade to the mill , with internal income..however, that's not the issue, the issue is that because of supply chain delay issues, covid protocols ,quarantines and mandates, labour shortages etc. etc. all caused by a--hole politicians, they would not have been able to avoid delays in getting the mill upgraded on schedule..So, instead of maybe only getting the mill upgraded by late 2023, They went out and bought the lakewood mill for roughly 73 million $ cdn..and by doing that pushed up the timeline to the present for getting the company up to 200,000 ounce production. .Unfortunately, something like this takes money, hence the reason for the bought deal... If they don't go out and get that 60 million$ bought deal, then they would be cutting it close in terms of using up too much of their cash on hand and therefore giving themselves no cushion of money to protect themselves from more potential unseen troubles in the future. Of course now they have that new term loan/line of credit of an extra 80 million $...The ramp is a different matter altogether, because it's a job that does not need anywhere near the manufactured parts that the mill does and so the work goes on without delays . Money is not an issue with the ramp either...Now, getting back to the higginsville mill upgrade, I'm sure quite a few million $ has gone towards the construction already but now there will be less urgency getting it completed as they need to let their ore quantities catch up to their mill capacities... But, the work will get done and will be paid for internally , at which time, krr will have approximately 3.7 million tons of ore mill capacity...With the BD ( 60 million$) and the new line of credit ( net 50 million) + 75 million$ in the bank, they have 185 million$cdn minus the 62 million$ cdn for the mill purchase , still gives them about 123,000,000.00 to play around with for other shareholder accretive endeavours...I mentioned Argonaut gold having a major future capex expenditure of now about 920,000,000.00 $ cdn to build a new mill etc. for one of their major gold deposits and I use this example to show how Krr's situation is so much better and much less expensive in comparison...Karora has succeeded in becoming a 200k producer , almost immediately and at a very low cost... Sure, there is some dilution, but not all dilutions are created equal.. This present 8-9% dilution is well worth it, in my opinion as time is money and this bought deal is going to bring many rich dividends to shareholders as it's enabled Krr to buy an important money-making asset and it has sped up Krr's timeline ..It has saved Krr lots of time and lots of work..