Ann: Proposed Capital Reduction and Return, page-46

Two days ago I posted, wondering what would be the rationale regarding the proposed issue of shares to employees and management at a reduction in value of 26% (15cents down to 11cents following the return of capital).

It seems, however, that the issue of employee bonus shares are a taxable transaction.  The tax being calculated on the "market value" under an employee share scheme.  So, if the shares have a market value 4 cents less than they previously may have had, then the employees/management etc. receiving those shares are that much better off when they account to the Tax Office. 

And the potential of the company's discoveries goes up the same whether from a base of 11cents or 15 cents.  (also see Eshmun's postings of 2nd. October).

I'd like to think that management might think they are close to being able to say that they now have satisfied the provisions of the performance conditions (significant discovery, improving the company's position etc.) by having brought this capital repayment into play.  The bonus shares would issue, the market responds to positive announcements and CHN's shares finally start to climb.  Let's hope so, and that we are not too far away from a significant announcement or two.

All my own speculations.  D.Y.O.R.

MM