Dentonia Resources, Ltd. (DTA), Kalimantan gold Message Board

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Gold/Mining/Energy : Dentonia Resources, Ltd. (DTA), Kalimantan gold

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To: Truk who wrote (5)	3/25/1997 1:43:00 AM
From: Taz	Read Replies (1) of 17

Truk: Excellent question! Initially I would say that it sure doesn't instill investor confidence for the long term, unless of course you happen to be one of the placees in the private placement. However... there is a formula that is used to determine the price of shares and warrents in a financing of this nature. I'm not sure of the exact formula, but it has to do with the average price of the trading price of the shares over a specified time frame prior to the close of the placement, or something to that effect. I think different exchanges have different rules in this regard. On the other hand, if some person or persons are willing to load up on this stock at this price, they must have some confidence in the company and it projects/holdings. Should the company come up with a significant find in the next two years then whoever did this placement is going to have a lot of profit especially if they exercise all the warrents. Yes you have further dilution, but that is one of the necessary evils of financing of this nature for public companies. These are my humble opinions on this matter and I'm still learning how a lot of this works. It is good to have these discussions, however there are some very knowledgeable people out there who could give you a more accurate explaination, you just have to find them. As well you might want to phone up the company and see what they have to say in answer to your queries, I'm sure we'd all be interested to hear what they say. Regards, TAZ.

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