At the shareholders meeting for the capital raising, DF said that they didn't need to raise the full amount. He basically said the company would be good even if they only raised a fraction of it (because of the deal with the contractors etc).
How many shareholders proceeded with the CR on that basis? He sold everyone at that meeting a very sunny day!!
Then with just a few weeks of the iron ore price plunging below AGO's cost everything is basically over. Cash burn is too great and AGO is basically buying time. He can't let the company fold too quickly as IMO legally they could be held liable. You can't say everything is great and then within 4 to 5 months of listing, are no longer a going concern. At the end of the day, had they raised another $50m or $80m then they would have been in a stronger position to trade these low ore prices (be these prices they here to stay or temporary). Whichever the case, the low CR left the company weak and vulnerable yet he said not raising the full CR wasn't going to matter.
If I was a director who sold the CR back in June/July I would be very worried about future litigation.
AGO Price at posting:
1.8¢ Sentiment: None Disclosure: Not Held
