Ann: Diggers & Dealers Presentation, page-91

Management can’t gamble on the drill bit now. Even if they found something really good, the market knows u still need money and you would proceed towards production anyway. You may get a placement away at a higher price, but it’s not happening. They also need the cash in the can to carry on in this direction. They don’t want a very weak balance sheet going to bankers and brokers.
Don’t forget, they were drilling some obvious targets anyway. They had some success but the risk is that if you blow all your money on drilling and you don’t get meaningful results, you are back to the market at an even cheaper price and you’ve delayed production. One thing about doing the placement is that you get certainty. The market expects this and then the price can move forward. They are better off to limit the drilling right now as u have your BFS resource, raise the debt and equity and turn the plant on next year. Once she’s up and running, go drilling more aggressively. It may take them some time to find new ore bodies, so it’s a process.
Once the money gets done, we then have the refurb time to fill in. The plant is basically there, so it’s low risk to deliver a working operation.
You would think the company should be worth $200m when up and running and it’s currently below $100m come placement. This suggests it’s worth in the mid to high twenties even after the placement. That would still be a low PE. Once they sort out the money, it could be a great pickup. Dyor and good luck.