It's imperative that directors be scrupulously honest/accurate in their reporting.
On January 21, RMX chairman Neil Warburton issued a letter to shareholders confirming implementation of a share purchase plan underwritten by Paterson Securities to the extent of $250,000.
"The Plan is capped at $700,000…", Warburton said.
Today, RMX MD, Jon Dugdale, announced the SPP had been oversubscribed and that the board had "resolved to extend the previously announced cap of A$700,000 to $2,454,771…"
On reading this I - like others here - was dismayed.
Had not Warburton led us to believe the SPP would be capped at $700k?
But then later - revisiting Warburton's January 21 statement - I read this:
"…the Company reserves absolute discretion regarding the final amount raised under the Plan (subject to the maximum permitted under the ASX Listing Rules).
"If necessary the directors may, in their absolute discretion, scale-back applications."
Today, Dugdale said the extension to $2,454,771…was within the maximum allowable under the ASX Listing Rules."
There would be an 11.3pc pro rata scale back to apply to all valid applications received prior to close.
"This arrangement is seen by the Board as being the most equitable to all shareholders", Dugdale said.
“We are very pleased with the high take-up in the SPP by our shareholders.
"This has provided the opportunity for Red Mountain to fund all planned exploration programs and finalize our development plans”.
After comparing the announcements by the two men I can't find a contradiction.
They have been very careful in their wording.
While I think Dugdale could have shown sensitivity by fully explaining the decision to treble the "cap", I find the men's reporting credibility intact.
RMX Price at posting:
2.3¢ Sentiment: Buy Disclosure: Held
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