RE: halt to p.p. subscriptions"In view of the drilling results obtained to date, the Company elected to stop accepting subscription funds toward its recently announced private placement in order to minimize current shareholder dilution.
(from the latest press release on drilling)
How do you interpret this?"
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I interpret this in a positive fashion - looks like they've got enough $ to do what they think needs doing for awhile, and you wouldn't expect this move if they were a scam or if they privately knew the project to be less prospective than the market sees it. So it's encouraging. I would say they expect the next drill results to be very encouraging, and they expect the shareprice to reflect this fairly soon. I expect both of these things too; but let's just see if a) the next drill results are good, and b) the market wakes up and gives rgz a price commensurate with it's resource and it's potential.
Within the bounds set by the exchanges, they need to go further in painting a picture for prospective investors as to what this project might come to be. Proving up more tons plus casting some economics - eg a scoping study - would be the way to put their best foot forward. (Finding the starter pit is also always a good move if you can do it.)
The sheer numbers on the deposit are their greatest selling point, so they have to focus on these in their public positioning. If they get to $50 billion nominally insitu, and have some intial plausible projections of good profitability eg irr 20%+, then who could deny that the company would be worth at least 1/2% of the insitu? Even if purely on the "what if?" speculative chance, during our decade long commodities bull.
Giving us a mkt cap of US$250 million dollars - ~CA$300, or 8-10x today's market cap, if the project comes through even to this point of progress. They don't even have to "make it" in order for rgz shares to do well, if all goes good. So I would be looking to sell some if they ever got to that kind of price, but i would certainly try & hold some to the bitter end, because the leverage just keeps coming with this baby. This will either be no mine or it will be a big mine bought out by a major company at major company prices. There is costly infrastructure required to do Titan properly (if at all,) but the economies of scale keep getting that much better the larger you go, so majors would at least give it a look. From there, rgz is in the lap of the MajorCo economic geologist Gods. They want projects that cost $2B for the deposit and $1 Billion for the development etc as long as they give a comfortably satisfing irr for a long time.