Ann: Market Update-XTV.AX, page-30

Yeah but does Cove Resources have a huge debt holder called Bergen?

Realistically there are only two options but both hurt shareholders significantly:
1) Relist and/or Consolidation then Cap Raising at a discount.

XTV has more than 1212.5m shares on issue currently (especially after satisfying Bergen in the recent announcement which is yet to be revealed of how many shares.) I have had a read of the T&C's of Bergen's investment. XTV only will have the 2M convertible security. I doubt and would be very surprised Bergen would give consent to use the other tranches for up to 10M. (as it requires mutual consent in the agreement. Information from announcement 31/05/16)

Now the acquisition requires 13.5 million in cash to be paid for the acquisition to take place. (Announcement from 19/04/16) This means that chances are XTV needs to raise 12 million in cash (12 million as it's evident that some of the funds from 2 million bond has been used) from equity. (especially since Bergen wouldn't allow there to be another debt holder so Bergen can remain in control of the situation)

Even with a consolidation, there is the high possibility that this equity of 12 million will be raised at a discount. So let's say that it will be at a 15% discount to the current SP. Hence this will mean an equity raising at 0.68c, which will mean that 1,764,705,882 shares would be issued. Now an equity raising has an underwriter and a cost so let's say around 30 million shares as cost (being conservative) which makes almost 1.8 billion shares for the equity raising + the 1.2 billion shares in existence already = 3 billion shares total. This indicates already 60% dilution or an increase of 150% shares on issue. After all this, shareholders may be left with something. (Now consolidation wouldn't make much difference as the approximate dilution would be the same. But at least the SP would look better at a higher price.)

There is a high possibility that XTV may raise more cash to be left with something for the acquisition. This means higher dilution.

Then acquisition goes through and shareholder's may hold to recover their losses.

Now the worst part is shareholders in the company will have to give agreement to all these events or Bergen would just take the company into Voluntary Administration. (Option 2)

2) Voluntary Administration - Since the company is debt financed, Bergen would take all it's cash and get out with a loss of around 1 million. Shareholders would be left with worthless paper.