Spot,
Thank you for making the call.
"Julia said they took an average of the last 20 days to list the price at .35"
Spot, sometimes when I look at Noront, I pretend I'm a majority shareholder and I think about the moves I would make.
If i had to do a PP for drilling, I would want the most minimal dilution. I would not want an ultra low priced PP.
Coin-cidentally, Clarus Securities, house 24 was selling like crazy during the month of January.
If I was RCF, i'd ask them if I could scoup those ultra cheap shares since I love gobbling cheap interest shares every quarter. Likewise....if I was Clarus and had to sell a chunk for some reason, I'd call up RCF and ask if they wanted them. It would be a win win. Clarus wouldn't have to sell for so cheap.
But, I still ponder about this cheap PP. With our buddy Clarus coin-cidentally setting the stage for a cheap PP...the question is why?
Recently Noront provided a NSR to RCF in exchange for 2.5 million. If I was RCF I would mention that the money would better serve to drill with?
"The Company has also closed the previously announced sale of a 1% NSR royalty (the “Royalty”) over the Eagle’s Nest deposit to RCF for the sum of US$2.5 million. The agreement contains a buy-back provision whereby Noront can repurchase 50% of the royalty for US$3.125 million for a period of 30 months. The proceeds from this transaction were used to extinguish a US$2 million bridge loan payable to RCF and for working capital."
IF you were RCF and owned this massive chunk of Noront...and in Jan.14 took 39 cents shares in payment for interest for this "2 million dollar bridge loan", ...would you recommend a cheap PP at 35 cents? or would you recommend to extend the loan due date and add it to the 15 million. Why not use this money for drilling?
I can just see the usual pundits coming on board with ....."maybe RCF needed the 2 million really really badly."
I'm doing my ha ha ha in advance.
I'm looking at the most recent Noront corporate presentation and combining it with Noront's statement in the 2013 MD&A about partnerships and financings before gov't infrastructure announcements.
Let's assume for a moment this is still the case.
Let's take a look a some examples of financings...one that comes to mind is this one.
http://www.infomine.com/index/pr/PB255988.PDF
Glencore made an off take financing deal with YTC Resources, but this deal also included a little sweetener:
Glencore to subscribe for a placement of YTC shares to the value of $2.95 million at a 25% premium to YTC’s 30 day VWAP
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In the case of Noront let's speculate for fun and pretend that there is a share sweetener alongside a financing/partership.
Let's pretend the structure is similar. ..that there would be shares offered along side an off take agreement at a 25% premium to a 30 day VWAP...
As an example let's assume this magic end number is not to exceed 50 cents...
Having an average of not more than 39 cents with a 25% premium would keep you just shy of 50 cents.
If a deal was on the table similar to this ...it would certainly explain the most recent stuff that has taken place.
All just guesses folks.
Once thing is clear to me though.
Noront would not be exploring and would not raise money for drilling if the gov't was still "trying" to get it right.
That kind of action provides you with no bargaining chip.
