1. If there is no 300 to 1 share then any large entity would have to go to the open market to buy forcing the existing shares up making a profit for the share holders now. Selling new 300 to 1 shares on the open market WILL cause dilution immediately. It might be better if no new block was sold by kwg but allowed to be created by joing existing shareholder shares to make a new 300 share.
2. Why does KWG need to do this now. The rail will be built by Chinese funding to secure and be paid for by chromite. Like a mortgage but paid back over 70 or 80 years. The Chinese will also want an off-take agreement or partnership to secure the chromite. Once this is in place along with the railroad reality the banks and financiers will be falling all over themselves to lend KWG money for a mine (maybe even the Chinese themselves). As for the ferochrome facility don't forget that the Chinese want the gas patent big time!. The Chinese will have to deal to get that. Maybe they will finance the ferochrome facility to get the use of it in thier own country. Why not because they will then maintain there status of being the cheapest steel makers in the world with the gas patent. Not being able to use the gas patent will put them at a disadvantage in pricing in making steel world wide. With a rail and a mine financing the facility will be sought after by all banks and lenders.
3. As Frank said in the cover letter funding is hard to come by for MOST juniors. KWG is not MOST. Kwg has MAJOR ore bodies. Those are the juniors that are getting funding from many financial sources that do not create a new share structure that WILL create DILUTION. Large institutions find a way to invest without the 300 to 1 share. EX: rcf, franco nevada, beaousteel with Noront. Hudbay with Macdonald mines. They found one of the many other ways that kept the small shareholder safe. By not having to buy existing shares but given the option to buy 300 to 1 unlimited shares there will be dilution.
4. From Frank's memo large shareholders might want to margin. Well i own over 11 million shares and warrents and i don't want to margin i want the existing shareprice to go up so i can realize a profit.
5. Management trust. That is where due dilligence comes in. Frank has done a super job so far but that is why the law says this kind of forward motion versus another is to be voted on especially after a large discussion on just what kind of forward planning has been contimplated. That's what these blogs are for to be able to discuss diferent ideas and opinions.
6. When investing i also look at how many shares management has but i also look at how they acquired them. Did they buy them on the open market. Did they get them over the years by having them given to them by management yearly as appreciation. ( At least 5% of outstanding share count can be given out to management this way every year). Many ways. I find it comforting to myself when management has put hard dollars from thier own pockets when aquiring thier shares.
7. In order to gain access to institutional investors we need to get the share price far higher. There are many ways to do this . I belive another way with the Chinese on board and the government road announcement immenit will generate so much attraction that the share price higher will become a reality like so many other juniors that found a large lucrative ore body. Those are the ones found funding without 300 to 1 shares. For instance Mountain Province Diamonds was 15 cents but now is over 6 dollars. Good profit for the shareholders there!
Do your own due dillegence. Take your circular to your OWN LAWYER and ask him who you trust for advise. I and my over 11 million shares and warrents will be voting noto this forward motion on this circular. Read it through and get trusted advise. It could mean that your profit is at stake.
Good luck to all kwg longs.
