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Midway Gold Corporation Ordinar Message Board

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  • cmonivleeg cmonivleeg Nov 23, 2012 8:01 PM Flag

    MDW is a great buy at $1.52 and anybody the disagrees is a stupid

    the 70mm is NOT enough and more dilution will be coming unless they sell themselves. So, my guess is this gets to 1.80 or so and than dies, if they take this to the end and assuming 200-225 million share and expected cash flow this will be 6-$7. But its a long road from here. So trade well

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    • You are very diplomatic. In my opinion, calling other people “stupid idiots” just because they may disagree with an idea of great buying at $1.52 is immature, just to say the least.

      Regarding this financing, in my opinion company rushed things causing some damage to shareholder value here. I would not call this damage excessive. After all, they got cash to do most of construction and, moreover, this deal is disguised as equity, i.e. Pan mineral assets are not used as collaterals and so company can still shop for banking loan later. However, they could, I believe, get better conditions if they would wait until permit and, by the way, getting permit in time still presents the same risk, i.e. risk profile here (for shareholders) is still the same, while share price potential got reduced.

      The most negative implication, imho, is that this deal has created vested interest for financial partners to suppress stock price. Firstly, they can collect 8% in company shares, i.e. suppressing price could be valuable to get more shares. Secondly, any convertible deal presents opportunity to short stock in relatively safe mode, because shorting side (convertible holders) is guaranteed to have shares at the end that could be used for covering purposes.

      • 1 Reply to warmcamp
      • this done, so no surprise given the opportunity to take sizeable cash they took it. In terms of the
        deal itself an 8% coupon is a little high in this environment and tells us these guys were probably the only buyers. That being said the stock is still cheap assuming gold holds and permitting doesn't get side-tracked. As far as this fund laying on the stock, they will if their business is convert arb and yes its a free 8% or higher if levered.

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