Well Tony, for my part, I wouldn't care to short the paper of any credible company that has demonstrated significant values of desirable metals in their assays. But in this case I find the suggestion stimulating, and worthy of consideration.
For one thing, I find the decision to seek financing at $1.00 a bit troubling. If you're sitting on some hot cores, why would you go for the financing before showing them to the market? I'll cite ARP as a good example. It was clear before last season started that they would need to arrange financing to complete the following one. They pulled some pretty decent holes last season, and based on their confidence in the property, they decided to wait until after this season's program had begun before seeking financing. The result was that they were able to finance at $2.00 instead of 40 cents. Now here we have Yamana, with the cores in their pocket, and they are rushing to complete financing at $1.00 with the rational that, "we couldn't pass it up".
The second concern is that there has been no announcement of closure for the financing. The subscription offer was to expire on the 27th, and we have heard nothing. Yamana set a precedent earlier this year of neglecting inform us of a failure to close, and meanwhile leaking the word out the back door. Troubling. A failure to close would be bad news.
Now look at the market we are in. ARP pulls a core with 255m of +6g/t gold, and the stock fails to approach its recent high. What kind of cores will it take for YRI to get a good move? Based on last year's results, one would expect Yamana to pull some nice cores on their current drilling. But this financing has to leave one wondering.
A final concern: the company has apparently had some problems with program management this year, ie the rigs breaking down and some problems with access. If past experience is a guide, these should serve as a warning sign of potential trouble for investors, ie that the results of this years program may fall below expectations. |
