Niocorp Developments Ltd (NB)

[NavyHusker]

I'm not a complete expert on this, but this has been my experience in the past with other stocks that have done this.

You are correct that the PP will add to the total overall outstanding shares - this is generally called dilution. The short term affect of this is that the current shares are worth a little less because the company theoretically has the same value, but more shares.

The effect of this though is a cash infusion to the company to execute on whatever plan they are trying to raise the funds. If they execute well, that plan increases the overall value of the company by more than the drop in price caused by the dilution.

In the short term, it stinks for existing shareholders. Hopefully in the longer term it works well.

Bottom line though is companies need money. They can get that through revenue (we have none at the moment), increasing debt (may be good or bad depending upon why and how much), or issuing more shares (i.e. PP). Remember once shares are issued to the public, the company doesn't receive any additional revenue from those shares as they are traded in the markets. Even if the stock price skyrockets, that only helps existing shareholders, not the company until they issue more shares (unless of course the company has existing shares that they are simply selling).

I am hopeful that in the case of Niocorp, this PP is a necessary step to get past the FS. It is encouraging that there was enough positive response to the PP that they offered an expanded one. If they had done the PP and there was little to no interest, then things would be very bad because they company needs money & no one wants to invest in them.

GLTAL