Cline Mining Corporation T.CMK

Dilution in the cards

[bond46]

With the global economy improving, most likely there will be no sale of the company and dilution will become inevitable. In which case there is a possibility CMK may go into production end of 2nd callendar quarter and beginning of 3rd. This scenario of met coal rebounding in the 3rd quarter was expressed both by Teck Cominco and Arch Coal in their quarterly guidances. And as I mentioned in this board before, it's unlikely Bates and co would want the company sold at a time the met coal markets are pregnant with a rebound. And though the company has been put up for sale, my belief is that this is more of a public relations exercise rather than a real intent to sell the company. The best solution Bates and co would wish for would be a sales contract, joint venture or an offtake agreement rather than an outright sale. The question is, do they have the time to wait. I don't think so and thus dilution may become inevitable.

[shane117]

Bond, a sales contract or an offtake agreement won't cut it. The Marett condiitons are that Cline has to raise at least 35million to pay their debt by Feb 28th. a contract and offtakes don't meet those requirements.  

[Jcamp89]

Isn't the dilution only happening if the company goes to marret? In which case bates and co will most likely be fired, so it's still not in his best interest to wait around to long?   GL, Happy trading! jcamp

[bond46]

Yes we may have changes on the Board of directors since in the Marret Plan is specifically stated that Marret since with the dilution will be the major shareholder, will have the right to nominate its own members on the Board thus controlling the Board. And  if they go ahead with any changes, we'll most likely see Stone take over as CEO. But I would not bet on that since Marret as a

[Jcamp89]

Yeah, see and IMO this is exactly why bates will do everything in his power to not let marret take control of the company, even if it means selling the company at discount to maximize his return on the 4m shares and options he holds, that being said if he can line up buyers for the coal instead I'm sure he'll take that route, I just don't see management letting the company slip through

[bond46]

Hope you're right and from your mouth and to God's ear that the company is sold. If the company is not sold, Bates and co the only thing they will probably lose is their job; they can keep their diluted shares and if the company does well under Marret they'll get their pound of flesh, too. As for the options they have, they are all worthless because no one would exercise them