In my opinion, DILUTION is not a dirty word. In this industry, a junior explorer wants to be that proverbial 1-in-1,000 junior that makes a discovery which is going to need funding to put into production. Of course, it’s going to involve DILUTION. Post-financing, an investor is typically going to own a smaller percentage of a MUCH MORE VALUABLE entity. Similarly, in a JV situation, the shareholders are going to have their ownership percentage in the overall property (not share structure) be DILUTED in exchange for money spent by the major and the gaining of the expertise of the major.
There is no corporate event in the genesis of a mining company which PREDICTABLY increases VALUE more than putting a mineral discovery into production and joining that 1-in-1,000 club. In essence, the GOAL of a junior explorer is to sacrifice the DILUTION associated with going into production in exchange for a much larger percentage increase in VALUE. The flip side of that coin is that the DILUTION associated with raising money to go explore for a deposit and take on those incredibly distant odds is often NOT good DILUTION.
My investment thesis in this sector, which has been evolving through the years, is WAIT for a junior to irrefutably PROVE the bona fides of any perceived DISCOVERY. How do you do that? You wait for the junior to put it into production. Any financier that agrees to do the funding is going to be a lot smarter than you or I. Let the financier do your due diligence. The SWEET SPOT in any investment is getting in right before any jump in VALUE occurs. In this particular sector, the biggest jump in VALUE occurs right as the lucky explorers go into production.
Maurizio is the largest shareholder in Medinah, Cerro, Masglas, AUMC and Auryn Holding Corp. This is the ideal when the financial goals of management align tightly with that of the small shareholders. He would be the biggest victim of any untoward DILUTION.
IS MAURIZIO REALLY ABOUT TO SCREW THE MEDINAH SHAREHOLDERS AS HAS BEEN SUGGESTED ON THIS FORUM?
Maurizio has had all of the opportunity in the world to screw the Medinah shareholders but he chose not to. Why would he start now when his percentage ownership in AUMC is somewhere around 73% when he chose not to screw Medinah when his ownership percentage was only 10 to 20%? Don’t confuse the DILUTION associated with raising funds to go into production with the DILUTION associated with raising funds to go explore.