What dilution impact will the private placement have on existing shareholders and the share price?

Dilution mechanics – A $525 k private placement will add new shares at a price set by the underwriting agreement, which is typically 10‑30 % below the last traded price to attract institutional investors. Assuming SONO’s current market price is CAD 0.20, the raise would require roughly 2.6 million new shares (525 000 / 0.20). If the company presently has about 25 million shares outstanding (a typical size for a micro‑cap gold explorer), the new issue represents roughly 10 % of the pre‑offering float. At a lower market price (e.g., CAD 0.10) the dilution could be nearer 20 %. In either case, existing shareholders will see a proportional reduction in earnings‑per‑share (EPS) and net‑asset‑per‑share, and the immediate market reaction is usually a modest price decline that mirrors the discount and the %‑dilution (≈‑5‑10 % on average for small‑cap placements).

Trading implications – The infusion of CAD 525 k gives SONO additional runway for drilling, permitting or corporate expenses, which is a positive fundamental catalyst for a cash‑starved gold explorer. However, the short‑term technical picture will likely be a gap‑down or a gradual slide as the market prices in the dilution. Look for the next support level on the daily chart (often the 20‑day moving average or a recent low‑volume consolidation zone) and consider a buy‑the‑dip if the price stabilizes above those levels and the company’s drilling program shows credible upside. Conversely, if the stock breaks below that technical support with volume, the downside risk expands to the next major moving average (50‑day) and a stop‑loss around the 30‑day EMA would be prudent. In summary: expect a 5‑10 % near‑term price impact from dilution; if the capital is deployed into value‑creating projects, the longer‑term upside can more than offset the short‑run share‑price hit.