Ann: Sulphur Springs Off-take, Financing and Permitting Update, page-5

Haven't heard anything yet but of course it isn't an SPP, no need for a trading halt, as there was no need for a trading halt last SPP in Nov. So it's a placement which doesn't look great for those buying in market recently. Question is how much?

I can't see why management would bugger around for a couple of million. There is enough money to easily get through next quarter and finalise the finance and funding package with over $1.5M in cash and $1m undrawn loan facility expected at end March. That means that management doubt they will be ready to hit the funding package and FID by the end of next quarter, otherwise why cruel the share price now with a poxy little CR and remind everybody that VXR is still famous for missing deadlines and diluting shareholders into oblivion? Hard enough to hold any share price rise in this market with that reputation, introducing more discounted shares to cap any future price rise doesn't make sense.

The logical explanation, assuming management aren't getting kickbacks from unscrupulous brokers US College style, is that the EPA delay has thrown a spanner into the works and they want enough capital to start pre-works at SS and keep their mine development timeline on track while waiting for the finance and funding package ducks to line up. It doesn't matter how many off-take equity deals are on the table, even if management sign a JV sale deal today for the equity component that equity will not be usable until due-diligence and especially all conditions precedent such as EPA Approvals are in place. Bit like putting a house under contract, sure the deal is good as done but the money only gets paid on the final execution of the contract, which only happens once all sale conditions are met. Buyer can't take the money back once it's handed over!

I suspect that company was made aware of the EPA delay a week or two ago, digested the implication that it would stall closing and funding of any finance package, if not delay signing a finance package in principal, and therefore chose to hit up the market for enough funds to get things started while the EPA drags it's feet. If this CR was their plan all along than why not go into a trading halt and raise when the shares spent a week or two at 25c?

I'm sorry to guess the brokers get gifted $8M at 21c (couldn't stomach them getting anything cheaper), trading halt until after the weekend. Trying to put a positive spin on things, happy to be proven wrong with a SPP, off-take placement or even small placement to brokers. Sigh, one's never too old to learn lessons, just which I didn't keep learning the same ones over again.

Good luck