They issued a lot of options and warrants at a significantly lower price to current prices to get company started (this was my one negative I found on them in my DD process). My guess is that many original shares have turned over in the past year. Most of these lower priced options and warrants have been exercised, unfortunately they still have 12 mil warrants left with an exercise price of $0.50. On a positive note the share structure is much tighter now and the company should have positive cash flow soon. They shouldn't have to raise any more money to get mine started from here.
IMO this is a pretty safe entry level for a significantly undervalued near term producer. They also have massive exploration potential on their land package. This is one of my larger positions I'm holding but has been under performing many of the other gold stocks so far.
From the website:
PEA ESTIMATES (from Oct 2016)
Positive cash flow of US$558 million over 9 years, an Internal Rate of Return (IRR) of 113% and achieve an NPV5 of US$415 million 400,000 tonnes per annum (108,000 Au Eq per annum) over a 9 year period with cash costs of US$547/oz AuEq and all in sustaining costs (AISC) of US$619/oz AuEq
Treatment of 3.2 Million tonnes @ 7.1 g/t Au, 25 g/t Ag & 1.7% Cu (9.3 g/t Au Eq*) over the 9 years Initial Capital Cost of US$13.84 Million
(This does not take into account the historical estimates of >1.3 mil oz Au or the recent drilling that found a new previously unknown Judd vein or the recent high grade drilling results at Kora and Irumafirmpa)
SHARE STRUCTURE
As of December 31, 2016
SHARES ISSUED
119,426,527*
WARRANTS
21,615,225**
COMMON SHARES ISSUABLE UPON CONVERSION OF CARTESIAN PREFERRED SHARES
9,503,662
OPTIONS
10,550,000
FULLY DILUTED
161,095,414
* 21,215,167 common shares are subject to 18 month escrow, with 25% release every 6 months
** Warrants include:
12,707,909 exercisable at $0.50 expiring Nov. 20, 2017
7,078,255 exercisable at $1.50 expiring July 20, 2017 [K92 can force the acceleration of these warrants at its sole discretion with 30 days notice]
1,829,061 exercisable at $1.75 expiring July 25, 2017
