saucy doubts and fears

Lydian (LYD.to) thanks its long-term shareholders…

…by diluting them to kingdom come and weighing the company down with debt and a stream that takes virtually all the potential operating profit away from the bottom line (therefore shares) forever. And ever. Amen. Armenia.
Say thank you, long-term shareholders. NR here.
Here’s a quick, non-scientific thought or three:
  • Right now LYD has 184.6m shares out.
  • If we assume the $105m placement they plan to run happens at 25c, that’s another 420m shares on the pile. So let’s be nice and round it to 600m S/O.
  • Then there’s the small matter of $160m of debt to pay back.
  • Then there’s the $60m stream to service, which is (all the silver and 6.75% of all gold produced at $400/oz, though to be fair LYD has only included the silver it will produced in its AISC numbers, so 80k oz Ag per annum shouldn’t affect things too much).
All that on a project with a $338m NPV at $1,150/oz gold (even if you’re the extremely generous type of person that lets LYD get away with its very skinny 5% discount rate marketing) and therefore at this point, to sum up and be able to concentrate on other more important matters*, IKN offers up this visual summary of today’s news from LYD:
Not the first time for this useful summary visual on junior mining companies, won’t be the last. 
PS: I adore the way the share price popped form 23c to 25c at the opening bell. It’s a pleasure to be reminded how the human animal will grasp at any straw available, however thin or weak. But when it comes to juniors, lasciate ogne speranza, voi ch’intrate.


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