Recent

% | $
Quotes you view appear here for quick access.

Entrée Gold Inc Message Board

  • skid1949 skid1949 Nov 20, 2011 10:02 AM Flag

    Dilution

    HN, can you fill us bagholders in on the positive spin concerning the issue of the additional shares to be offered?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Trading EGI could be interesting if you are a candid trader (I'm not). RIO probably sees EGI as a strategic asset. If they are 100% sure of the value of the resources - they could either buy the resources or buy EGI. Both actions would limit the potential of this stock.
      Seen the price reaction of the 10% share issue I think that mgt. has learned a lesson and in the future they probably will not issue again via this underwriting construction. Issuing shares via a claim-emission would be much fairer to the existing shareholders. Doesn't make much difference to me (i'm buying now in at a lower price than anticipated) but for the normal shareholder these new shares sold at such a low price are an unpleasant surprise.

      HN

    • A company like Entree burns money as long as the mines are not operational. So, you can expect either lending against assets or issuing of new shares. Issuing shares is always a better option for the company (is risk capital - no interest etc).
      Entree is sitting on a huge amount of copper and bullion. It is still in the ground - becoming more valuable over time. But...... as long as it stays there we have no cash flow. So - to get the money flowing we need some capital to trigger the proces. Entree has some cash (10.000k) but barely enough to bridge the gap between now and the moment of positive cash flow (2015/2016). Two options: 1) stop drilling and waiting for 2016 to restart 2) Add some money (by issuing shares) to intensify the search for more....

      For me it is clear that option 2 is what they should do. Isn't Entree all about exploring and searching!!?? The chances for them hitting gld/copper etc in the areas theý posses are now better then ever before. Pouring money now into Entree makes a lot of sense. The offering of new shares will be a success - i'm sure.

      About the dilution. I said earlier dilution from what? There is no cash flow or profit yet - it is difficult to dilute something that is zero.... Dilution of future earning then. IMHO there will be NO dilution of future earnings as long as the number of new shares are in the 20-40% relative to the old existing number of shares. How is that possible you will ask me? It is very simple. I expect that the money will be used by Entree in such an effective way that in fact the future earnings will be upgraded with more than 20-40%. The company is very near some extra "HITS" in Ann Mason and Mongolia. Just one extra hit would bring the cash flow figures already moving in a ++-zone. You could make all kind of scenarios for this. Fact is that the money will be spend in a for the shareholders very lucrative way. In that way i don't see any dilution. The bigger the success of the share offering the stronger the company gets (THE MORE HITS WILL OCCUR). There is more than enough in the ground to profit from. I have no objection at all against any share offering. On the contrary......

      HN

 
EGI
0.3050.000(0.00%)Jul 22 4:00 PMEDT