Actually my reasons for considering reverse split scenario is not based on company reaching a billion shares in 2013, but on reaching 150 to 200 billion shares, based on following assumptions which are optimistic IMO.
1. Company will need to raise at least the same as last year, i.e. approximately $400,000.It is unrealistic to assume they will need to raise less when they forecast going into production. This means more dilution in the short term putting even more pressure on the stock.
2. Accepting what several people have posted that meeting permit conditions will not require lots of cash, and will be in place by June to permit a September start date
3. To attract a higher level of investors, to enable private placements with less of a discount than the convertibles, they will need to get a price between $.08 to $.20. As I have indicated with a DTC chill and a price below $.05 many brokerage firsm wont take the stock certificates of this company, and many investors wont take seriously with a stock price under $.05.
4. I do not believe the company's IR strategy is that strong, so they will need all the help they can get to raise the stock price.
5.Will take a few months to arrive at profits and positive cash flow from custom milling.
5. CFO will renogiate property and mill payments, and mine development costs deferred until 2014.
I would rather see a 1 for 5 reverse, and private placements of stock at a 15% discount, than oonvertibles at a 50% discount.
I do not think the above is bashing the stock.I may be wrong that their IR and progress may get them up to a $.10 price without a reverse, just less probable in 2013 IMO.
AI
