NOBLE MINERAL EXPLORATION INC. (“NOB”) has raised $175,000 by way of private placement at $0.01 per share. is not a big fan of the TSX Venture Exchange’s discretionary waiver provision as set out in the TSX.V bulletin of April 7, 2014 that allows for such low priced private placements. The ability to undertake one cent financings simply creates huge dilution, it forestalls the inevitable for many of the exchanges’ listed issuers who are destined to fail anyway; especially in markets as we are experiencing today.
This current $175,000 will keep Noble breathing a little longer, but not much longer. We’ll assume these funds the only portion of the $300,000 best efforts private placement that IBK Capital was engaged to pursue according to Noble’s December 07, 2015 news release. As per the company’s audited financials dated August 31, 2015 Noble had $626 cash on hand at that time. Noble announced January 18, 2016 that the Ministry of Northern Development and Mines in Ontario (MNDM) has for the second time rejected Noble request to drop the some $894,950 of taxes owed to the MNDM by Noble. Noble has a total of $1,914,874 of liabilities on its audited financials so we are not sure what will be accomplished with the only $175,000 raised.
Noble’s market is currently $0.005-$0.01 and the company had 160.5 million shares out excluding the recent $0.01 private placement. The issued and outstanding after adding in the 17.5 million new shares will be approximately 178 million shares. Noble’s Vance White has a great track record and many years’ experience but even he is going to facing an uphill battle into a head wind with Noble. We think it unlikely that anyone will be eager to provide additional funds to pay hundreds of thousands of dollars of accrued past debts. Looks like a good chuck of the other $999,596 in accrued payables of the $1,014,874 of total liabilities is possibly due to insiders. They may take tens of millions of shares in lieu of cash but the MNDM is not likely to follow suit. Without a million dollar cash injection from somewhere to cover at minimum the MNDM, sadly Noble would appear to be facing an unavoidable insolvency. Either way, if Noble can be saved by White it will most certainly have to undergo a significant rollback.