How will the additional C$11.0 million capital raise affect Eloro Resources' dilution and earnings per share?

The upsize adds another C$11 million of equity to Eloro’s balance sheet, which will be issued at the same price‑per‑share as the original bought‑deal placement (approximately C$0.12‑0.13 per share). Assuming the same pricing, the secondary issuance will create roughly 85‑90 million new ordinary shares, taking the total share count from roughly 350 million to about 440 million. All‑else‑equal, this ~25 % increase in shares dilutes existing shareholders and will push the company’s diluted earnings‑per‑share (EPS) down by a similar magnitude unless net income rises proportionally. In the short term the EPS guidance for the current fiscal year will be revised lower, which typically weighs on the stock price until the capital is deployed into value‑adding projects.

From a trading perspective, the dilution risk is already priced into the market – the stock has been trading on a “buy‑deal” discount and the announcement of an upsized raise tends to trigger a modest sell‑off (historically 3‑5 %). However, the proceeds are earmarked for expanding the Tantalum‑Lithium project, which could materially improve future cash‑flows and margins. If you are risk‑averse, a short‑term trade targeting a 3‑4 % dip on the next 2‑3 days may be appropriate, with a stop just above the pre‑announcement level. Conversely, long‑term investors may view the raise as a catalyst; buying on the dip and holding through the anticipated production ramp‑up could yield upside if the company meets its growth targets and EPS recovers in the next 12‑18 months. Keep an eye on the upcoming quarterly release for any update on the use‑of‑proceeds and revised earnings guidance, as those will dictate whether the dilution is a temporary pain or a step toward higher future earnings.