Hello, this is a question for everyone here.
I am looking for what you have seen from explorer's that turn into miners.
From what I understand, the biggest hurdle (after establishing feasibility) is acquiring initial capital expenditure in setting up the mine. This has to come before you can get any money out of the mine to sustain operations, which leaves only 3 possibilities:
- Debt financing
- Funding via share dissolution
- Being bought out by a bigger fish who already has the cash to do it themselves
I have only ever witnessed option 3, so I am unsure what the expected path would look like if SPA decided to develop the mine themselves.
As a shareholder, option 1 looks the most appealing as it keeps the higher price per share (I would think), but seems unlikely. I can't imagine any financing institution willing to risk hundreds of millions for interest alone. The interest on that may be more costly than dilution otherwise would be anyway.
I imagine reality is a mix, but am looking towards what people here have actually seen. If it get's diluted, how much can we realistically expect?
The mine may be worth $2.2B, but not until it can find and spend $600m first. Would be a shame to dilute at $100m market value to get there, but I am not sure what is realistic in this scenario.
Any input is appreciated.