Bears got lucky with IBC Advanced Alloys Corp (CVE:IB) as their stock collapsed when the company started seeking additional funding.
IB collapsed 18.2% during Tuesday’s trading session under a spectacular volume of 5.9 million. This was nearly 6 times heavier than daily average turnover of 985 thousand.
The cause for such a price tumble can be associated with the company’s intentions to raise additional capital. On September 13, the company got a receipt from securities regulatory authorities of British Columbia and Ontario for a previously filed preliminary short form prospectus for unit financing ranging $5 to $8 million.
Units offered consist of one common share of IBC and half a warrant to purchase a common share exercisable over 24 month period. Neither price nor quantity hasn’t been set for these units yet and will depend on the context of the market. It will be announced shortly before the official offering.
IB needs capital to pay down their debt, buy inventory and fund general corporate needs.
Currently, the company holds a working capital deficit of $1.5 million. The $2.1 million in cash cannot even cover one quarter accounts payable. The new fundraising would add significantly to the already large dilution which reached 57%.
In other, more encouraging news, the company also announced that their Vice President
of Nuclear Fuels, Jim Malone, was appointed as a chairman of the Fuel Technology Working Group, which was recently created by the World Nuclear Association.
