Majestic Gold Corp. V.MJS

Amount to be raised via HK listing

[nozzpack]

So, the Five objectives of the HKEX are..

1...Fund the expansion of the Open pit and U/ G current mines via..
....expanding the current open pit size horizontally by 50% and the depth by an even greater amount exposing  new economic ore with average grades of 1.16 gms per ton

....expanding mining capacity from 2 m tons per annum to 3.3 million tons per annum..This will , with doubling of head grades, increase annual production from 40,000 ounces currently to over 85,000 ounces once fully expanded

...infrastructure expansion including larger discharge reservoirs, power upgrades , drilling programs to convert resources to 2P

....working capital provisions

...Paying off current bank debt

This is first priority of the HKEX.

My estimate is something over $55 million US

But, a secondary objective is to acquire via a JV, an advanced gold deposit within the same operating range as our current two mines, with a minimum of 750,000 ounces of economic ore, capable of providing Persistence with a 51% working interest that will generate at least 15,000 ounces of low cash cost gold per year.....It seems the deposit has already been selected from about 5 such qualifying deposits.
The budget for this is listed at 300 m yuan which is about $45 million US.

So, total expansion costs to achieve 100,000 + ounces of gold will be about $100 million US.

How Will that be funded ?
$55 million US via HK IPO plus $25 million US from MJS cash position plus another $25 million of bank debt.

My read is that the HKEX IPO funds will be used exclusively to expand our current two mines, with the secondary objective of acquiring another advanced gold deposit funded via internal cash and bank debt.

They will need About $0.70 US IPO price to raise $55 million US, with 80 m shares post consolidation of about 1 share for 3.5 old shares.

So, from $0.07 x 3.5 = $0.25 cad post consolidation price to about $0.70 x 1.30 = $0.90 cad.

If all goes well, we shall see a 3-4 times appreciation in our share price , to match the IPO price once the HKEX listing is approved , with subsequent gains generated by substantially increased production financial metrics ....which would seem 3-4 times on top of the listing gain.

This is the best reductionists estimates that I can extract from the 750 page HKEX listing document .
Any comments to their approvement would be appreciated.

[Value2020]

As per your calculations how much are current shareholder getting diluted? Seems like 32-33%. Correct me if i missed something. We give up 1/3 our control and hopefully get something in return?  Whats wrong with putting 20-30 Mil every year and wait for the market see the market cap below cash positon.