Tonogold Resources Inc (TNGL)

[massher]

As far as I understand the company will be looking at giving current shareholders priority in the capital raising so hopefully those investors that aren't currently shareholders may be "encouraged" to buy on market to become a shareholder and guarantee preferential treatment. The traditional issue with a potential raising is that new potential investors will merely try and secure stock via the capital raising. The wY that Tonogold will be giving shareholders priority means that those investors who merely sit on the sidelines risk not being to participate at all or at a much lower level than desired. This strategy should help with pre- raising pricing by securing on-market support/buying and thereby support/enhance the on- market share price which is always the basis for the pricing of the raising. That I believe is the theory which could ensure optimization of the capital raising pricing. However IMO pricing must ensure that post capital support ensures that those who participate in the new raising benefit in an immediate price appreciation. Investors who face immediate losses become despondent, disappointed and nervous and could result in a "cutting their losses" soon after the raising. These investors will be lost potentially forever. Additionally the next capital raising will have the knowledge of an immediate determination of the last raising and will either be reluctant to invest and/ or demand substantial price discount to reduce the potential of immediate share price determination. Clearly this is a complex and delicate exercise where fine tuning is critical. However you are right the first Fe days next week is going to set certain lines in the sand.