Ann: Trading Halt, page-7

It's frustrating seeing so many companies raising at lows and a substantial discount, often with options as an additional incentive. Looks like this is also happening here.

Once a company reaches a weak position like I feel it clearly had (in this case no cash, debts rising, production clearly not having gone to plan), then investors aren't going to want to go near you unless they are getting a deal they feel comfortable with, and this often results in an outcome current investors are very disappointed in.

I find it surprising that during the past 12 or so months when most specs have been slaughtered, that a majority of companies I've seen have waited until the last moment to raise funds in the hope that sentiment and/or newsflow would help result in a better outcome. From what I've seen this has resulted in companies raising at/below lows or thereabouts more than 9/10 times as investors won't buy good news knowing there is a high chance a raise is required in the near future. The only way to have avoided this was to raise before the market had got a sniff of the company heading toward a weak position. I put my hand up and say I thought that this one would be different, that they would get it together. But it was clear from the quarterly that this was not going to be the case. The debt extension deal with Noble (CR terms and extra oppies) was a clear sign of what was coming soon.

In hindsight the company would've been smart to raise this amount in Sep/Oct last year rather than what they have done (drag it out as long as possible hoping the market wouldn't call the bluff). Perhaps management genuinely believed in the mining operation going much better, but ensuring the company doesn't reach a weak position such as this has proven time and time again to be the prudent thing to do.


Based on the above, 96mil shares and 48mil 2c oppies are trying to find a home at 1.25c. There was possibly an opportunity to raise the same amount at a 50% higher price (1/3rd less dilution) in Oct/Nov last year and not have to put the oppies in to sweeten the deal.

I'm very disappointed that it got to this point. I still believe that if the mining can be sorted out soon and resource drilling commences that this can turn around in a few months time, but for the short term I'm much less optimistic.

FWIW, considering how illiquid this has traded, how thin the buy side is and that mining has not gone to plan, I think the raise is about the expected going rate if not better, especially when compared to some others of late. Especially considering 6 trading days ago the price closed at 1.3c, This could've been much worse IMO, but it sure isn't a great overall outcome considering the past 6-12 months.