To clear up a few points, NVB are not buying 19.9% of AYN shares, they are being issued a further ~25% of the existing issue. Current shareholders interest will be diluted to about 4/5 of current interest. Given they are paying $.005 each for these shares, that values the rest of the shares at $.005, not $.008. Round figures, $.004 per share x 3761M shares gives current MC of $15M. At $.005, adding the extra 975M shares to NVB gives $.005 * 4736M = $23.7M for market cap. That is roughly where your $24.4M comes from, but it looks like there will be some further shares issued as they raised a total of $12.832M, less the $7.4M raised under entitlement issue gives $5.432M. Subtract $4.875M, that leaves $557K or another 111.4M shares, taking total issue to around 4847M shares. 975M / 4847M = 20.1%, so there is some rounding error in there somewhere.
With nearly 5B shares on issue, would think a one for ten consolidation might be on the cards further down the track.
Dilution is not real good for the options though, SP to hit 1c now needs a $50M MC, before this issue $38M was enough. For that to happen, selling 1.2M oz per year on a P/E of 10 needs a net profit of $4.16/oz. That said, the extra cash should go a long way to getting the costs down so the margin goes up.
Regarding the T/O issue, the $2.5M promissory note does not come with any voting rights. Only when it is converted will they get up to the 30%. The ann indicates that with SH approval, NVB can take a 30% stake without having to launch a T/O bid, not too sure on how that all works. My understanding is that the conversion of a promissory note is based on the SP at time of conversion, so higher SP means less shares issued on conversion.
Generally, I think this is a positive development, far better than a metal streaming agreement. It does raise the possibility of a takeover at some point though.
Now, if the PoS can just get off it's lazy bum....
AYN Price at posting:
0.4¢ Sentiment: Hold Disclosure: Held
