Here's a post from someone named Jay 10000 on the Smart Investment site. He puts some perspective on this PP.

"Hi all,

While I am certainly not happy with the dilution, consider the position a lot of these junior producers are in. Just starting up production and working through the issues. The mill is up one day, down the next.

Could they fund themselves via cash flow? Sure but then their mill upgrades and continued exploration would take much, much longer. BUT what if gold takes another dump to $700 or lower (I don't think it will, but it's certainly a possibility). Now you're sitting there 9 months down the road with a marginal operation making no money. Check out what happened with Silver Eagle. Bought out today for 6 cents after coming within an eyelash of bankruptcy. The zinc and lead prices crashed just as they were becoming cash flow positive.

This financing removes a lot of that risk. And who knows, with the size of this financing and the timing (right after the PDAC), I'm betting there at least one large institution involved as they wouldn't be raising this kind of $$ via retail investors.

Fact is, nobody knows what is going to happen in the markets. I'd take some money to sustain the company now as it may not be there later in the year. Ramp up production quickly, get costs/oz down quickly and be ready for the next upleg in the metals.

First Majestic and Scorpio have done the same. Yamana, Alamos, Silver Wheaton have all gone to the markets as well. Among others. Get it now while it's still there. Play it safe. Could they get by without the PP? Likely. But why take the risk? Remember retail investors are not the only one's being diluted out, upper management, directors etc are all in the same boat. Don't think for a second that they're not looking out for their own interests too.

For disclosure purposes I do own shares and warrants and will participate in this PP (only because it is with Northern and I am a client there so it simplifies it).

Cheers,
Jay"