Reading the 10k, I wonder if dilution and time-to-mine are near term stock price factors, beyond the reports of large holders selling for non-Metalline-specific reasons. Note this:
The Company estimates that completion of a feasibility study will cost an additional $3.3 million and the Company expects that it will take an additional 12 to 18 months to complete. Following the completion of a successful feasibility study, the Company would then proceed to the construction phase, which would entail construction of a mine and related infrastructure pursuant to a Mine Plan developed specifically for the Company's concessions, and construction of an Extraction and Reduction plant to extract metal from the ore that would be mined. The Company estimates that construction of a Mine (based on the Mine Plan) and Extraction and Reduction plant would cost approximately $400 million and take approximately 2 to 3 years to complete after completion of the feasibility study, assuming sufficient funding is available. The Company intends to finance construction costs with a combination of equity and debt. In addition the Company may seek joint venture partners or other alternative financing sources as necessary to complete development of the project.
In order to finance the feasibility study and the business operations described above for corporate overhead through completion of the feasibility study, the Company has raised capital by selling unregistered shares of its common stock as described below in “Liquidity and Capital Resources.”
I realize Metalline won't be mining this (at $400MM to build!), and a buyer doesn't care how many shares are out; buying the company is just a market cap issue. Still, going from 20MM to 34MM shares in the past year affects ROI for us speculators, and it gets more draining going forward. If, say, there are 80MM shares out by time of a full feasibility report and share price by then is the appx. $2 it is now, that is a $160MM market cap. I suspect that dilution/time to mine equation (plus demand uncertainty 2 years out) is part of what the declining share price is indicating, but I would like to be wrong. Someone tell me I am!
I'll likely hold to feasibility or buyout; question is how low does it go and when do I add? Absent new fundamentals or a better case than I can make to myself about why the market will embrace the MMGG story any time soon, I'll let the chart be my guide. |
