Quite a fuss on the stockhouse board as ATW, having hit new highs and gone into production where they are supposed to be cash-flow positive.
So, the private placement comes out and its 22% under yesterday's close and offers a half-warrant at yesterday's closing price.
Seems pretty unfair to the earlier holders.
Now, here's the part that rich. The buyer of this unfair bargain is Sprott Asset Management (a pretty successful group of hard-nosed deal makers). Some of the posters on the message board see this as a silver lining as having Sprott accept a gift like this is a win-win situation because SAM "gives us much needed publicity".
Yet another example of how having stockholder friendly management is moving higher and higher in my evaluation of Jr mining stocks. From now on I'm going back at least 2 years on any stock I consider buying and look at what kind of financing they had done and when and why and for how big a discount.
I think I'm getting to the point where I can predict this kind of thing. Whenever a company hits a significant milestone and achieves a 52 week high and has plans for growth that requires capital look for the private placement. This kind of management is not patient enough to grow the company through its own cash-flow. They want grow a big empire as fast as they can so that can "take something off the top".
Here's my list of companies that are on my own confirmed stock holder friendly list (in the order they come to mind):
- Gold Resource Corp (GORO.OB) - management owns 1/3 of the company, the strategy is clearly to make money without diluting the company and the company targets 1/3 of all cash flow to dividends.
- Capstone Mining (CS.TO) - has done stock buybacks in the past to support the price when inordinately driven down. Did the whole Silverstone Resources strategy to unlock extra value for their shareholders.
- Impact Silver (IPT.TO) - is small, making a profit and resisting the temptation to dilute or get into debt to fund growth.
- Troy Resources (TRY.TO) - has a history of paying dividends and maintains a good balance sheet and is growing / obtaining new mining resources organically.
Here's my list of companies that are on my tentatively stock holder friendly list:
- Castle Gold (CSG.V) - profitable, not in debt, growing on cash flow and has a committee established to determine explore selling the company.
- Semafo (SMF.TO) - seems to be growing well without a lot of dilution.
- CGA Mining (CGA.TO) - has an extremely high percentage of institutional investors who won't put up with mindless empire building.
What companies do you have on your confirmed shareholder friendly list?