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I spoke to Wheaton's IR about the proposed issuance of new preferred shares. They claimed that it was, more or less, and oversight not to include this provision when the company was first incorporated. They also explained that issuance of such shares would only be a "last resort" if the company couldn't raise it's portion of the financing required to get it's Costa Rican mine into production. Apparently the bank will only cover 70% of this cost, assuming of course that the feasibility study pans out. I suggested that they go the route of a shareholders' rights offering to raise the roughly US$5,000,000 they will require. At 50 cents Canadian per share, such an offering would result in the issuance of about 14,300,000 additional shares, plus say about 7,150,000 in warrants. The dilution has to be considered, however, at least this allows common shareholders to retain full ownership, and not allow a small group of preferred investors to "horn in". As well, if the POG increases, then WRM shares will go up, meaning that any such rights offering would involve a lesser number of shares to be offered, with a corresponding diminishing effect on dilution. What do the rest of you think? Regards. |
