At first glance, it seems like just a footnote. However, a second, deeper look quickly reveals that the investors of
In the field of explorers and mine developers, capital increases are a very sensitive indicator, as they signal the general market sentiment and the investors’ confidence in the respective company. If the mood is down or investors meet the project or the management’s plans with strong doubts, companies often have great difficulties placing the new shares and raising the hoped-for funds at all.
If, on the other hand, the general market environment is right and investors meet the company’s plans with confidence and great optimism, the new shares, as in the case of Gold Terra Resource, not only sell like the proverbial hotcakes, but the capital increases are often heavily oversubscribed.
A Clear Vote of Confidence for Gold Terra Resource
For Gold Terra, this means that the recent capital increase has brought not only the originally planned 6.3 but ultimately 7.0 million Canadian dollars (CAD) in fresh funds into the coffers. The new shares were issued both as ordinary common shares at a price of CAD 0.10 per share and as tax-advantaged flow-through shares at a price of CAD 0.12.
The recent capital increase thus brought 10 percent more money into the coffers than originally planned. This is not a matter of course, but a clear vote of confidence for Gold Terra Resource. At the same time, the size of the share placement was so small that a strong dilution of the existing shareholders could be avoided. Thus, the capital increase takes into account both the company’s goals and the interests of old and new shareholders.
