analysts valuation at $4.30+, page-13

Why didnt the directors exercise their options in TAW?

We are talking about 4million bits of paper at 50c, or $2m premium. This is not chump change, and the directors dont have that sort of cash without selling their ordinary stock which they didnt want to do. I asked Phil Chisholm, the corporate director, the same question and his answer was that they werent interested in underwriting as they didnt want to spend the money and didnt need all the options to be exercised anyway, and didnt have the funds to pay the premium (they exercised something like 400,000 options, for a premium of $200,000 and werent going to sell their stock to finance the whole premium). They could have done the smelly thing and sorted out their mates and various grubby brokers with cheap options but chose not to, and let the options lapse as the company didnt need the money and not exercising them gave less dilution. The directors own a huge chunk of the ordinary stock and believe this stock is going to be worth a fortune, and arent interested in the usual games that plague junior companies. Most refreshing. Phil Chisholm is a great presenter, and gives a lot of confidence in the direction of the company and the level of professionalism they have towards its market. After the option exercise, the company has $7m in cash, which is enough to fund its five drilling programs or bulk samples for the next two years, after which the TAWOA options will probably be exercised and inject a further $17m of cash into the company. These guys are not going to go for cheap financings or scummy option deals with the projects they have and the cash they have in the bank. Class act.

I hope they find the big one here, as the structure is right, the management quality and the timing right. If the alluvial lives up to the potential, we are talking about a project worth over $10 a share, let alone the kimberlites and blue sky from the BHP Falcon drilling program going on around Finsch. This one is for my bottom drawer and I am not a trader in it.