Can anyone explain how DGR management allowed over 10% of our 12% interest in SOLG to be diluted with over 134,000,000 new options given to SOLG employees and directors at 60pence in 2020/21. DGR's percentage interest in SOLG drops 10%, e.g., 12% to just over 10.8%. Should there be a takeover of SOLG, as everyone predicts, then these options could be worth a lot more than 60 pence each. If say BHP offers an average takeover price of one pound per share, then employees will immediately make a 40pence profit, should they sell their 60pence options. DGR holders, who are not employees, will not receive anything from this dilution and, if anything, one could expect the takeover offer to be lessened per share due to another 134 million new shares existing. So my holding in DGR will now be worth considerably less (CONSERVATIVELY 10% LESS) should a take over offer result. Perhaps the answer to this question might involve that our CEO who owns nearly 20% of DGR . DGR owns around 12% of SOLG, i.e., NM's 20% of 12% equates to roughly 2.4% of SOLG again owned by CEO who also owns 5% of SOLG. So CEO owns now roughly 7.4% of SOLG.
Remember that BOD have also allocated an additional 10,000,000 X 60 pence options for themselves.From past history our CEO of DGR and SOLG (MAHER) will presumably be allocated the lions share of these options....as his incentive. Remember the last lot of 6.5 cent DGR options in 2017 where 13+ million options went to NM with two other directors being allocated roughly 7 million options (3.65 million each). NM is a very wealthy person in his own right so I would expect him to buy as many options as he can, especially if a take over is on the cards and confirmed.
Another point to consider: Most employees of SOLG are in fact locals and very few will be paid western/Australian type wages. As a third world country WOULD I expect that people who earn say $100-$2000 (????????) per week be expected to raise 60 uk pence per share for their entitlement of the 124 million options to convert them to fully paid shares. I understand that SOLG employs 3-4 hundred locals. So 124,000,000 options divided by say 400 employees equals to 31,000 options each which will cost them 60 pence per option to become fully paid, i.e., around 18,600 pounds(UK) each. So the locals who may earn roughly 6,000 pounds ($10,000Aust) will need to raise 3 years wages in order to take up their entitlement. If they don't take up their option entitlement what happens to the left over options. Perhaps other employees will be able to take more.
I suggest that our BOD, senior management and Aussie employees, geologists etc., all employees of SOLG, will swoop on any options not taken up by the locals. NM will likely take another huge chunk of this 'employee incentive scheme' after being rewarded through the separate directors Incentive scheme. Remember, for each 1 million X 60 pence options (cost 600,000 UK pounds) that may be sold in a takeover of say one pound per share will equate to 400,000 pound profit. 124,000,000 options could realize 49.6 million UK pounds profit. The directors will profit by an additional 4,000,000 UK pounds in their own director's scheme. How many directors will be eligible for this profit?
One can envisage that 49.6 - 53.6 million UK pounds is one heck of an incentive should a takeover of 1 pound (UK) occur before these options expire. If a takeover is done and dusted, will existing current shareholders of SOLG and DGR get any benefit from this capital raising. NO! I doubt whether a possible takeover company will pay more just because the number of shares increases....they will come up with a value for the whole company and offer "X" amount, e.g., 2 billion pounds total then shareholders will price per share (more if extra options not included, less by 10% if included). Another kick in the fact to non director DGR shareholders......again and again.
If takeover occurs any money raised will go to SOLG company which becomes the property of the new parent company. 124 or 134 million X 60 pence (minimum of 74.4 million UK pounds). The extra 40 UK pence goes to the new option holders after they come up with the 60 pence to make them fully paid.
No money changes hand if a takeover is not made or where a takeover price averages no more than 60 pence UK before the options expire.
In my view this is a outright money grab by our CEO and his fellow directors. One has to ask why our top DGR and SOLG shareholders have allowed this slight of hand to occur. Meanwhile, you guessed it, our DGR share value falls once again.
Expand
(20min delay)
