RE:RE:RE:RE:Gold in the ground Thinking out loud:
Market cap in USD = $372 MILLION
Shares outstanding = 200 million
NFG needs money very soon. We need enough money to get us through the period prior to getting the MRE completed and revealed, and to get plans created to get NQW into production.
Let's say the rearranged managment team negotiates the sale of 10% of NFG to some Big Buyer. Say 20 million shares at $2.00 USD, a nice round figure. Maybe they have to throw in another 10 million warrants exercisable at $3.00 USD for a couple years forward.
Next, after all the studies are done and we have a clear path forward to production, we raise the cash needed to get into production by getting a loan and selling some more equity.
The most cash conserving method to get into production is to utilize the MOU with Maritime. This is surely the FASTEST way to get into production, and the CHEAPEST way to get into production.
Let's say we sell another 10% aprx of equity in NFG, say another 20 million shares at $4 USD per share, no additional warrants, AND the existing 10 million warrants get exercised at $3 USD. So, another 20 million shares at $4, plus 10 million shares at $3, equals $110 million USD raised.
IF more funds are needed to get NQW into production and quite decent positive cash flow going forward, you arrange loans to do that.
Thus, you end up with 250 million shares outstanding, enough money to get NQW into production and continue some additional exploration and defining of current known resources through the time to production.
We assume we will be significantly cash flow positive at this point to not need to sell any additional equity for further development and exploration. IF some additional cash were needed for development, such as to build a mill on QW, and end processing at Maritime, that could all be done with borrowed funds, due to the demonstrated positive cash flow from mining at NQW.
That's my thinking out loud notions.
Continuing to explore QW with NO PLANS to get into production is lunacy, in my view. It is essential to get into cash flow positive position by mining, and to do so as fast as possible, and as cheaply as possible.
Until NFG PROVES cash flow positive operating results, NFG remains a play toy for the Short position and the games of potential Buy Out / Buy In suitors.
Only by getting into significant cash flow positive operating position does NFG enter the time when it's value is easily recognized, and the share price can begin a sustained upward path to much greater share prices and market cap.
The challenge is to get to this new cash flow positive, actual mine operating position without selling out the company at bargain prices, EXACTLY the disaster that happened to Marathon when they were forced to sell out to Calibre at bargain basement prices, leaving shareholders with permanent losses.
Once NFG is into substantial cash flow positive, mine operating conditions, the path forward is wide open to exploring the FULL potential of ALL of Queensway for years ahead, and we would be able to see an advancing share price to possibly much, much higher prices, depending upon how much gold is eventually revealed on ALL of QW, and to depth.
This will take years, and this is why NFG may well be a very long term investment, and could well become an investment with ten bagger potential and even more from current levels.
But, damage has been done by allowing the Shorts to have their way with manipulating NFGs share price to such low levels, with no push back from NFG ( yes, its not easy to push back when you are exploring and have no cash flow, and MUST continue to raise equity).
It is important to at least clearly communicate how you are going to get into production ASAP, as cheaply as possible.
All other exploration stocks I bought have clear plans for this. That NFG has not communicated this has been a major mistake in my view.
Now, we pay the piper, due to the low share price, and the need to raise equity, given a dramatically lowered share price. ....the damage has been done, and we need to get through this situation, and get into production ASAP.
I don't really see another option other than to utilize the MOU opportunity with MARITIME. Building NFGs own mill on QW now will be too expensive, and take too long. The Maritime option, seems to me to be the obvious way to go.
HOPING for a HUGE BUYOUT prices by Big Gold is a pipe dream, I think. Big Gold can buy out plenty of projects at bargain basement prices.
Besides, clearly Erich Sprott doesn't want to sell NFG out for bargain basement prices. But, let's HOPE there is no plans to take NFG private, or force retail shareholders out in some forced sake situation. My sense is that Erich Sprott is a very honorable man, and wouldn't do that, just on principle.
The ONLY and BEST way forward is to stay as independent as possible, and get into production as quickly and cheaply as possible.
Forget about selling out entirely to Big Gold for big bucks.......I don't see that as a possibility.
To put it succinctly......
Don't SELL OUT to BIG GOLD. - BECOME Big Gold !