PAAS does use debt financing to build out mine properties. The problem with debt is that the lenders usually want covenants that require forward sales of silver. PAAS policy allows forward selling of by-product metals e.g. zinc, but NEVER of silver. (That's why we're all long PAAS, right?) So there are many times when PAAS says no thanks to debt because of the strings attached. This is why La Colorada is not being built out full-scale right now -- La Colorada could have been debt financed but this would have required hedging of silver.
No shareholder likes to see dilution, but the equity raise is probably the best way to go in a market in which silver languishes well below US$5 for the indefinite future. The cash raised can be used not just to sustain operations, but to acquire additional, attractive properties in the current distressed market. If management uses the $9 million proceeds of this secondary offering as well as they have used cash to buy properties in the past, then we who are diluted now will be repaid many times as the price of silver rises, as eventualy it must.