Western Copper and Gold Corp T.WRN

With $50m in the Bank

[jclarke042]

We're raising $8m more for some reason.

https://ceo.ca/@newswire/western-copper-and-gold-announces-up-to-80-million

[metalhead666]

Sinking some wildcat holes?  Would have been nice if the management explained themselves eh?  

[MetalMinded]

And with Paul in the Crux interview essentially saying we have enough cash.  Doesn't make any sense.  The only reason I can come up with is that a "friend" is getting in on the action before it goes to the eventual sales price.  No other reason for further shareholder dilution at this point.  I always hate saying this, but maybe it's time for som shareholder

[jclarke042]

I don't know, I can never get behind the idea a company intentionally issues shares (at a premium, no less) just so the Friends n Family can get in. They could've gotten in for much cheaper on the market. Be real nice if that friend is Rio, otherwise we issue them shares (more dilution) to keep their 8% whole. Unless I misunderstood that portion of the Investor Rights Agreement.

[MetalMinded]

Open to suggestions on other reasons, but if we have enough cash, what could cause the "need" to sell $8M more and dilute existing shareholders further?  I can't think of a good business reason to do it. 

[jclarke042]

I'll rephrase: I can't get behind the idea that ABC Company knows good news is out on X date, and raises just so the friends can get in cheap beforehand, or to repay a favor to someone.  My instinct was Rio, wanting to take Dale's board seat. But it's not enough for the 12.5% threshold, and I assume they'd say it was Rio if so.

[MetalMinded]

That's my point, there doesn't seem to be a good reason and raising when it is not necessary, let the CEO own words is not fulfilling the fiduciary responsibility to current shareholders.  So, they need to very quickly explain why this was necessary and is not in opposition to vmcurrent shareholder interest.  I wa for the last one, but this one has me both baffled and pissed

[GardenManman]

this is the disgusting action from junior mine, never should be trusted.

[MetalMinded]

This one actually has me pretty ticked off.  Contemplating a class action lawsuit.  Wonder what we could find out in discovery during that about what's been going on.  Emails, letters, many things would become available for review about what they've been doing, with whom, and why.  Shareholders must hold management and boards accountable for their actions because they

[metalhead666]

LOL!  It was only a matter of time until you proved yourself the idiot I always knew you were.

[Sooner]

I sent Sandy a message asking what's up with this as not in alignment with what we were just recently told! Will see what kind of response (if any) I get.  For all we know , it's just some housekeeping related to a Rio request...although I agree with everyone, that's seems kind of far fetched when we were just told plenty of cash to get thru permitting!

[Heywood_Silvers]

Although we didn't really need the funds, the new shares were issued at a premium to market.  Since they are flow-through shares (with tax benefits) they could be issued at a premium.  This represented about a 2% dilution to the current share base, so it wasn't like the share structure was obliterated. If an individual tried to scoop upwards of 3 million shares in the open

[Sooner]

Great! Then since we don't need another $8M in cash....we should start to strategic repurchase shares that were just issued. I mean there is no reason to have $60M in cash ....so if the proceeds are at premium to current market price...start buying back some of the shares and hopefully take more shares out of weak hands and putting in strong hands! Even Paul mentioned we have enough cash...but

[jsladek]

Companies that do share buybacks are ones that have cash far in excess of what they need. WRN is not such a company.  Spending $60MM that they just raised, to buy back shares, would be reckless and stupid. For exploration companies cash is precious. In WRN's case, no deal has been finalized, and while shareholders are optimistic due to the Rio strategic investment, there is no assurance

[Sooner]

The problem is we've been led to believe we have plenty of cash to get all thru permitting and beyond that with some cushion....so raising more cash seems highly strange and counter to the recent communication.  I think that's the rub. Hopefully we know shortly why the change in strategy and that this was done with intent to drive up market cap... I would think any future

[jsladek]

I don't know why WRN did this. They have a pretty long history going back to 1995 of making good decisions and I am not about to jump to conclusions based on something that I don't understand.  Given past history it doesn't make sense that, being so close to a deal, they would suddently decide to screw over the shareholders for $8MM. Regardless, what you wrote doesn't change

[Sooner]

Thanks - appreciate your constructive feedback. I for one didn't say a share buy back makes sense immediately after raising cash....but what i did ask is why have another $8M in cash when we've been told we have more than enough to get thru permitting and I've also stated i'm not a fan of further dilution (as has virtually everyone else on this board). Since you seem to have more

[jsladek]

Sooner, I don't have all the answers, I just know where to look them up - in the company filings on SEDAR.com! There are three main programs whereby officers, directors, etc can increase their holdings: Options, Deferred Share Units (DSU) and Restricted Share Units (RSU). The stated purpose of these plans is to promote share ownership by key employees, directors and consultants of the company

[MetalMinded]

That's a big part of the problem.  All we've been given for a "reason" is some generic non-specific BS.  If they had made the news release with more specifics as to why this raise was necessary, despite recent executive statements, maybe there would be less consternation. 

[Sooner]

Sorry might be stupid question - would it even be possible for this to be another company that wants a piece of WRN (for purely hypothetical purposes...say Newmont)....or is this not the way that transaction would be allowed to handled? No clue...but something is definitely fishy on this ...most especially since we were told very recently we have more than enough cash to take us thru permitting.

[Arrowhead77]

Normally* not the way this would be handled--but still a good question IMO. *Not sure what "normal" means any more.

[jclarke042]

Theoretically possible, but not sure why they'd choose this entry instead of announcing another "strategic investment," or some such. And not closing for 3 weeks so we'll have lots of time to speculate on what exactly is going on here. Until then I'll assume this is classic Junior Mining: never say no to offered money. 

[Sooner]

Maybe because the other private party wants to keep it private for the time being????

[jclarke042]

The fact they hired Cormark and RBC to sell the shares leads me to believe this isn't NEM (or another company) buying in. Presumably that'd be of the "non-broker" variety.  No, this looks like we need the $ for some reason.  

[gratvalyou]

I ve been around a while and over the last 15 years the one thing that kept me holding ....! Was Dales insistance to keep a low float!.  The royalty that Osisko purchased from Orion was a blessing and proved Dale was focused on keeping the share count below 100 mil. ........Well with 50 mil in the bank we seem to pissing in the wind! maybe they have settled on a piss poor buyout and this is

[MetalMinded]

Seriously smells like a breach of fiduciary duty by the board and execs to me.  Of course, without further explanation of the actual planned usage and need for the money leads only to that conclusion.  The press release was so generic and useless about how the money will be used and why it was needed.