GSS - It's certainly possible, but I think the amount will be closer to $40-50 mil US or approx C$45-55. IR dept wouldn't tell me an exact amount, but based on the information I got I think this will be pretty close. If it's much higher than 50 mil US I'll be disappointed otherwise I think the market can absorb this amount fairly quick.
Based on talking w/her I also had a few other observations I posted on the yahoo baord:
We'd obviously get the best share price return if GSS self funded and gold stayed at these levels or higher.
What GSS is doing here is ensuring that even if gold dips to sub $600 or sub $550 again that they have enough working capital to expand production, lower cost and ensure adequate power going forward. ST this sucks, but it really does take even more risk out of the stock in the event that gold does dip again.
Nobody know for sure when gold is going $800 again, but I feel like many here it's just a question of when. Maybe the next 6 months, maybe 1-2 years. Either way GSS will be hitting on all cylinders by that time. At $800 gold this is a 10-15+ stock. I can wait.
It would have been nice for them to wait for this stock to break $4 and let it run to 5+ before announcing this dillution, but if gold breaks down first back to the low $600's we'd be mad if they did it then.
Again it's all about risk/reward. This was probably a prudent move on their part.
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1) Would you rather have hedging or dillution? The company's bank would have required hedging to borrow more money. The company chose the lesser of two evils.
2) The total amount of the offering will probably be 40-50 mil. The high numbers that shorts are throwing out are bogus. Approx 10 mil for power plant, 15 mil for Biox, 10 mil working capital and maybe 5 mil for underground.
3) PR was put out w/out #of shares due to TSX regulations requiring that the offering price be determined by ave # of days trading. I'll try to find out when they'll be posting the number of shares and get back to the board.
Again I think the company is doing the prudent thing here. They could have self-funded everything, but it would have taken longer and they need the cash to build the power plant now. As for the Biox I'd rather spend a little bit of extra cash now and get up to full production ASAP. The other money required is relatively small. This removes even more certainty for those willing to hold 6 months plus. Stop bitching and use this opportunity.
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In spite of this secondary I still find GSS very compelling here. ST not many traders are going to pile in until the number of shares are known in the secondary. IR dept is supposed to call me back soon w/an approx date of when this will be announced. I'll be calling daily to pester her. GSS is currently my biggest position so I'm baised FWIW. It's one of the few gold plays of it's size that can double from current levels in the next 12 months with gold staying under $675-650 imho. If there are more I'd love to hear about them.
