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Gold/Mining/Energy : Geodex Resources - GXM.V (was Agate Bay ABE)
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To: Joseph LEE who wrote (119)5/16/1998 12:05:00 PM
From: Baywall   of 210
 
Joseph,

Some investors may have been concerned with the dilution at 18 cents. At this early stage with no properties announced, the market will not valuate the firm higher. Was the dilution necessary at this point or could it have waited when stock price may have increased?

I don't know the answer, but if the principals were putting their own money into the firm, thus in effect becoming creditors, it is possible they received some of the shares. This is nothing unusual in the junior mining industry. If such is the case, one may feel this is an unfair advantage to principals, but not necessarily since they need some significant potential returns if they are to put in the effort required. The small investor can always buy in at the market price regardless of what the principals/associated parties are doing.

As the stock becomes more diluted investors may feel uncomfortable. It will all depend on the market capitalization investors will assign to the property acquisitions.

Shares for debt are often immediately tradeable, but they may have restrictions placed on them. That is why message #121 posed the free-trading questions and were related to message #122 on tightly held share structure.

In my talks with management over the past 7 months I have not detected any hype on their part. They stated what they are doing and some general plans. If anything, my TA could be viewed by some as hype because it is still unproven with Geodex. Works in theory and back-testing, although not always with the required consensus. It would be difficult to believe that TA is 100% accurate. I would be comfortably retired and no books would be published on the subject if this were true.

I believe the news release on the property(s) is next. Thereafter I assume, will come NPV of the project(s), analyst commentaries and price projections. Another cycle will have begun.

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