TEY is currently valued at $14m by the market. If you assume the resource they own can be exploited, TEY is significantly undervalued. If EGS systems can be developed, TEY has a very well located resource.
They currently have three sources of funding to help them develop. Options, a drilling grant and AGL support.
The $7m drilling grant requires matched funding. TEY would benifit from option holders helping out on the funding.
We still don't know whether AGL will sole fund the first exploration hole. If AGL pass, a capital raising would be required. AGL own 10% of TEY. I hope they won't shoot themseleves in the foot. If AGL do pass, GDY might just say here's $28m (100% premium) and solve their transmission line problems on the cheap.
There has been pressure on the SP due to market conditions (eg: Greece). I belive the TEY share and option prices chased each other to the bottom (and beyond) as the end of March approached. I must admit I sold some TEY (above 25) to fund my options rather than selling the options into a weak market.
Anyone with options would not be tempted to buy TEY above 25c at the moment hence there is not much market demand to push the price up. I note the sell side is pretty thin if you wanted to buy a decent parcel it would push the price up. I think thats why large chunks of options were being purchased at the next to zero price. TEY has engaged a few companies to maximise the number of options that get converted.
I hope anyone converting the options aren't looking for a quick buck. I would hate to see the SP smashed by short term investers.
I will be keeping some powder dry in case the TEY SP tanks in the coming months. If AGL say yes, I may regret the conservative approach.
Come April, anyone who wants to buy TEY will have to pay market price. Any SP distortion associated with the options will have passed.
TEY Price at posting:
23.3¢ Sentiment: LT Buy Disclosure: Held
