If we are doing poetry...we can do fiction. This post is entirely fiction.
It is just how I would I would try to do it.
It’s for fun.
Current
Stock Price: .50
Shares: 200M
Market Cap: 100M
Assets
10 million in cash
Flow-Through shares (Tax Write offs)*
Equity
43-101 - Property of Merit
Goodwill
Our yearly loss is 4 million so we have a runway of 2-3 years.
Goals
1 billion market cap in 3 years.
Acquisition at premium.
* Flow through shares can only be used for exploration activities.
We need a Mineral Resource Estimation and an Economic Feasibility Study. The next stage in the development of the mine requires them. We are worth more if we have them, but they require significant drilling and the money for drilling is capped by the Flow Through Shares which are capped by our yearly loss.
We need 100k meters of drilling at $250/meter for 25 million dollars.
We can issue up to 25% of our shares without a vote. 50 million shares at a market value of $25M. We would like $50M.
We could raise money through private equity. Private equity is looking to multiply their investment quickly.
You may be wondering why would they buy from us over just buying from the market? Well for one, there isn’t that kind of liquidity and secondly, they would have to report their transactions which would make it difficult.
Pitch
We offer a three year plan with a 400% return on a 50 million dollar investment.
We have completed a Property of Merit Study to N43-101 standards. As a result we believe the production of a Mineral Resource Estimation and Economic Feasibility Study can be completed in 3 years and will significantly raise the value of the company and your investment.
The projections are based on an increase of market cap and the stock value. Our goal is to unlock other value through disposition. The investment is to de-risk the property so that is an acquisition target for multiple bidders at a premium tothe market cap.
3 year goal
Market Cap 1 billion (10x increase)
Shares: 350 million
Stock Price : $4.28
Investment Value: 214M
Plan
Year 1 Planning/Resourcing/Permitting
Year 2 Drilling/Data Gathering
Year 3 - Reports
Issues
A deal for that much equity at a premium may include board seats. There is a potential conflict of interest so we set up a special committee to negotiate offers.
Actions
We engage a showcase firm to market it. Hopefully we get multiple offers and start a bidding war.
Thoughts
Any deal is likely to impact the stock price negatively in the short term, however we think it will recover quickly with the three year plan and the announcement of a large drilling campaign.
And we wait.
Let me know if you want a part 2.