Re: This Week: Chad/Raul Investor Meeting San Francisco/San Diego
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Message: Re: This Week: Chad/Raul Investor Meeting San Francisco/San Diego
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Chad sent me his ansers to some of the questions that I will be asking him at the San Diego meeting.
Those are excellent questions. I will answer them in writing now so that we can discuss them more fully when we meet. See below for answers--
1) Early last month in Vancouver you said VIT had $6.5 million in cash and further dilution was the avenue of last resort. What happened to the $$$ and why not wait 3 weeks for drill results and a better PP pricing? Are the drill results anticipated to be that poor that this is the best deal you could make with Kinross? Or are the drill results anticipated to be so good that Kinross was not willing to wait and participate in a PP at a higher price?
The $6.5 million was at the end of August (fiscal Q2). And don't forget we forwared $0.5 million to Gateway after that as part of the merger. The timing on the PP was predicated only because during my marketing trips many investors were concerned about our cash position and Kinross's support. We felt as a board that it would be better to address these issues sooner rather than later. We didn't have the assays for NW-13a when we made that decision (assays are expected shortly as we said in the press release). Recall that we financed before NW-5 was released last year so we are consistent on the timing.
2) After this PP, how diluted will VIT shares be? We calculate a potential dilution of as much as 45 million shares, equating to a 40% dilution of existing shares. How can this be good for current investors like ourselves?
The board concluded that this was the best decision for shareholders. All investors have the chance to participate in the financing and thus gain exposure in upside from here. With this financing, Victoria can conduct exploration and secure its existing core assets for 18 months at least. We don't know how long the market malaise will continue so we decided that this financing was prudent.
3) After this PP, how much $$$ will be in the bank and how long will the $$$ last, ie what is the estimated monthly burn rate expected to be in 2009?
Our burn rate is low and falling because of price deflation and cost control strategies. Fixed costs (all salaries, offices, listing fees, etc) are expected to be under $2 million in 2009. And the minimum work commitment on our core properties is low as indicated in the press release. The cash position at the end of November (end FQ3) will be released before the end of January.
4) There is no mention in the NR of Hilltop work commitments for 2009, only a $500,000 work commitment at Santa Fe. Has the Hilltop project been scratched?
We are in discussions with Newmont on Hilltop. We hit very large altered zones in HT-7 and further drilling is absolutely warranted. However, the holes are deep and thus expensive.
1) Early last month in Vancouver you said VIT had $6.5 million in cash and further dilution was the avenue of last resort. What happened to the $$$ and why not wait 3 weeks for drill results and a better PP pricing? Are the drill results anticipated to be that poor that this is the best deal you could make with Kinross? Or are the drill results anticipated to be so good that Kinross was not willing to wait and participate in a PP at a higher price?
The $6.5 million was at the end of August (fiscal Q2). And don't forget we forwared $0.5 million to Gateway after that as part of the merger. The timing on the PP was predicated only because during my marketing trips many investors were concerned about our cash position and Kinross's support. We felt as a board that it would be better to address these issues sooner rather than later. We didn't have the assays for NW-13a when we made that decision (assays are expected shortly as we said in the press release). Recall that we financed before NW-5 was released last year so we are consistent on the timing.
2) After this PP, how diluted will VIT shares be? We calculate a potential dilution of as much as 45 million shares, equating to a 40% dilution of existing shares. How can this be good for current investors like ourselves?
The board concluded that this was the best decision for shareholders. All investors have the chance to participate in the financing and thus gain exposure in upside from here. With this financing, Victoria can conduct exploration and secure its existing core assets for 18 months at least. We don't know how long the market malaise will continue so we decided that this financing was prudent.
3) After this PP, how much $$$ will be in the bank and how long will the $$$ last, ie what is the estimated monthly burn rate expected to be in 2009?
Our burn rate is low and falling because of price deflation and cost control strategies. Fixed costs (all salaries, offices, listing fees, etc) are expected to be under $2 million in 2009. And the minimum work commitment on our core properties is low as indicated in the press release. The cash position at the end of November (end FQ3) will be released before the end of January.
4) There is no mention in the NR of Hilltop work commitments for 2009, only a $500,000 work commitment at Santa Fe. Has the Hilltop project been scratched?
We are in discussions with Newmont on Hilltop. We hit very large altered zones in HT-7 and further drilling is absolutely warranted. However, the holes are deep and thus expensive.
From Tom:
There are a number of other questions I will be asking Chad at the meeting. I will report those answers when I get back from the meeting in San Diego.
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