Why our price is dropping, and what could make it climb On the 21st of August GSVRF received approval for the next 2 years to offer up to US$ 65 million in common shares and warrants, at prices and on terms to be determined based on market conditions at the time of sale. This will increase the number of shares in the company. The money will be used for expansion of our four mines.
Since that announcement our stock price has fallen from $0.20 to $0.14, even though the price of gold and silver have been climbing.
Usually, a company offers prospective buyers the ability to buy shares in their company for up to 4 years, or so, at a price slightly higher than what it has been selling at, say $0.25 to buy one share of the company, along with a warrant to buy another share at, say $0.30.
So, $65 million would let prospective buyers buy 260 million shares, plus if they use their warrants, they will be buying an additional 260 million shares of the company, for a total of 520 million shares.
That means that our share count will increase from 400 million shares to either 620 million or 920 million shares. A huge increase in our number of shares, either way.
That is probably why our share price is dropping.
The only caveat is if the price of silver/gold continues climbing for the next two years, our stock price will also eventually rise to take into account the higher precious metal prices.
With the continuing acceleration of the government's spending (by both Democrats and Republicans) it will make our dollar more and more worthless, and people, plus central banks, will buy more and more gold/ (silver by people) as a safe haven. So, the prices of gold and silver should continue climbing.
Also, the company will be using the money to improve the output of our mines, as well as bringing down the cost to produce the silver/gold. That will improve the money that the company is making.
Additionally, the company can use some of the money to acquire more properties.
So, short term, our stock price may be going nowhere to downward. But long term, especially if gold/silver keeps climbing, our stock price could really take off.