What is the expected price impact on RSG’s stock once the private placement is announced and when it closes?

Immediate market reaction (announcement day)

The announcement of a non‑brokered private placement for up to C$1.5 M at a nominal price of C$0.05 per unit/FT share is typically interpreted by the market as a dilutive financing event. Even though the price is well below recent trading levels (RSG has been trading in the C$0.10–C$0.14 range over the last month), the key driver is the dilution‑risk premium investors demand. In similar Canadian‑exploration stocks, a private placement at half the recent market price has historically produced an immediate 5‑10 % sell‑off on the day of the release, with the size of the drop proportional to the percentage of the new equity relative to the existing float. For RSG, the offering size (~C$1.5 M at C$0.05) translates to roughly 1.5‑2 % of the current market cap, so a 4‑7 % dip is a realistic first‑day reaction, especially given the modest sentiment score (30) indicating a slightly bearish tone.

Impact at closing (post‑closing price adjustment)

Once the placement actually closes (typically 10‑15 business days after the announcement), the dilution becomes permanent and the share count will increase by roughly 30‑35 % (based on the current share count and the $1.5 M raise at $0.05). The market will therefore price in a lower per‑share valuation that aligns with the $0.05 unit price, but the impact is moderated by the fact that the proceeds are earmarked for exploration and development (a common catalyst for junior miners). If the company can quickly articulate a credible drilling‑or‑resource‑up‑schedule, the long‑term upside may offset the initial dilution, limiting the final price impact to ~7‑10 % below the pre‑announcement level.

Actionable take‑aways

- Short‑term: Consider a controlled sell‑off strategy—e.g., a small‑scale short or a put spread at strikes around C$0.09‑C$0.10 to capture the expected 5‑10 % dip, keeping stop‑losses above C$0.11 to limit risk if the market reacts more favorably.

- Medium‑term (post‑close): If the company releases a clear exploration spend plan and a near‑term drill target, accumulate on pull‑backs (e.g., limit orders near C$0.08). The key risk is a prolonged down‑trend if the market perceives the capital raise as a sign of cash‑flow stress. Monitoring volume‑spikes and the 20‑day EMA will help confirm whether the price stabilizes around the new cost‑basis level.