>>Rich, you seem to have some experience with private placements and seem to think that everything here is normal.<<
The few points that you had questions on were nothing new, but I have not seen this financing, so I can not give an opinion on the complete package.
>> What do you see as advantages to being in a private placement?<<
First, did you find out if the warrants were good for 2 years ? If so, it probably steps up 20% for the second year ???
Assuming that that it is and it does, the only advantage is the warrant. You get more bang for the buck, if things work out. The down side is your money is locked up for 1 year. If the project falls apart over the next year, you will not be able to escape. That is why, when I partake in a private placement, I feel better owning a free trading position, hopefully below the price of the private placement. I would be looking to sell that position sometime before the warrants step up to the second tear, or on any significant rally. Usually stocks get weak a month or two before warrants or options expire.
On this stock, I would partake only if their was a good chance of selling the deposit, which could happen within a year. If this thing goes all the way through to production, it will probably not be until 1999. I would expect a PE ratio of between 5 and 10 until the project has been producing for a year or more, then you may see higher levels. Just my opinion. Who knows.
Rich |
