How will the dilution from issuing up to $1.5 million in new units and FT shares affect existing shareholders?

The private‑placement will add a modest number of low‑priced units and FT shares to the capital‑stock, expanding the float by roughly the same amount of shares that are being sold at C$0.05 each. Because the price is far below the current market level, the new issue will be highly dilutive – each existing shareholder’s ownership percentage will be reduced by the proportion of the new shares relative to the total outstanding share count. In a pure‑equity sense, the dilution translates into a 5‑10 % drop in earnings per share (EPS) and net‑asset value per share, assuming the proceeds are used to fund growth projects rather than to offset the share‑base expansion.

From a market‑dynamic perspective, the cheap‑price placement will likely put down‑pressure on the stock in the short term. Traders can expect a modest sell‑off as the market digests the immediate supply of new shares, especially if the current price is trading above the C$0.05 placement price. Technical charts will probably show a fresh low‑high swing, with the 20‑day moving average crossing below the 50‑day line and a possible breach of recent support levels. However, the upside potential of the capital raise—funding exploration, drilling, or other value‑creating activities—offers a catalyst for a rebound once the proceeds are deployed and the company can demonstrate incremental reserves or cash‑flow growth.

Actionable take‑aways for existing shareholders:

1. Brace for short‑term dilution‑driven price weakness – consider tightening stop‑losses around current support or trimming exposure if the stock breaks below the recent low‑volume zone.

2. Focus on the use‑of‑proceeds narrative – if Rocky Shore can clearly articulate how the $1.5 M will fund projects that lift future cash‑flows, the longer‑term upside may outweigh the dilution cost, creating a buying opportunity on the dip.

3. Monitor post‑placement filing and capital‑budget updates – any indication that the new capital will be allocated to high‑margin, near‑term projects (e.g., quick‑turn drilling) could trigger a rapid price recovery, making a re‑entry at the post‑dilution level attractive.