Beware of Mining-Share Dilution

A note from a long-time subscriber, a cautionary note concerning the heavy dilution of mining penny stocks:

“I just got back from my yearly trip to Vancouver to attend junior mining conferences and presentations, and the one thing that really stuck out was the amount of financing that occurred at sub 10-cent levels. Billions of shares were issued in Q4 and Q4 2009 to keep companies afloat and move their projects along. A lot of this paper will begin to trade freely in the next six to eight weeks. I have one junior that has 143 million shares coming off escrow, with free trading to begin next week (float is 332 mm shares) of shares financed at 0.28 cents CDN$. The stock is 0.65$. There are hundreds of these situations right now. For people who do not trade juniors often, this set-up and the potential sell-off could turn into a real “learning’ experience.”  I saw John Kaiser speak at a workshop on Jan 18 on this topic and the magnitude of this issue is much larger than I have ever seen before. Just thought you might be interested. “