Posted by: born2sweat
Date: Wednesday, August 06, 2008 12:04:15 AM
Post #9392
Food for thought ;
Previously, about 900+ million shares were authorized (AS = authorized shares). That is simply how many shares are allowed to be distributed. The actual number is less. Not all of the AS were distributed. The shares actually distributed are the outstanding shares, OS. This is currently 800+ million.
Some of the debt was convertible debt, in other words, the person or company to whom the money was owed could wait for money, or accept shares instead ("convert" the debt to shares). Because the share price fell so low at one point (0.0007, or 7/100 of a penny), the outstanding debt could convert to a huge number of shares, in fact more than the number of legally authorized shares. So Eugene HAD to increase the number of authorized shares to avoid that happening. The alternative is to be forced to pay money instead, which is not available at the moment. So in fact, increasing the number of shares pays down the debt. This fact is being ignored by most of the posters.
Next point: Authorizing the shares is not the same as distributing them. Many posters are acting as if they think that there are already 2.5 billion shares out there. That is not true, there are presently 800+ million shares. Extra shares will be created (up to the authorized limit) as needed in order to pay off the convertible debt. Assuming $8 million in debt (some of which may have already been paid off by issuing shares) and a price of 0.02, that means another 400 million shares would pay off the debt. On third dilution is not bad to get out of debt and out of BK. I'd prefer no dilution of course, but Eugene may not have the choice.
That leaves over 1 billion more "authorized" shares. If these are ever issued (not necessarily all at once), then the money for them goes to Quest. Since cash flow from Pond Creek should be positive, those shares likely would be issued only if the money were needed to expand, say by buying another mine or more equipment or building the wash plant Eugene mentioned. Of course, it's better to sell these extra shares when the share price is higher, so I think this won't happen until Quest is at full 2 shift production and out of BK, and preferably after Cedar Grove is also producing. The sp should be higher then. In fact, if cash flow is great enough, these shares may never be issued.
So there are three different possible share counts, as well as the spectrum in between:
1. 900 million shares, pay off the debt with cash flow.
2. 1.3 billion shares, no debt.
3. More than 1.3 billion (up to 2.5 billion) shares, but money available to expand.
These are rough numbers, of course, and depend on share price, how much debt has already been converted, etc.
I'll be happy with any of these situations.
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Source: Post #9392 -----------
Alles wie immer IMHO! Das ist nur "meine" Meinung und dient nicht als Kauf- oder Verkaufsempfehlung. Jeder handelt auf eigenes Risiko. AYOR!
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