Ann: Voluntary Suspension, page-13

I see what you're driving at, but what you're saying is somewhat incomplete.

You need to also factor in the new money (asset) that will have been raised when thinking about the greater number of shares that are now on issue. One offsets the other.

BMM are valuing POS equity at $67m for the current equity (i.e. 1,115m shares @ 6c). They now own 85m of that 1,115m total, but lets talk about the valuation of the equity in the entire company for the moment. This valuation will be (should be) based on the fact that further funding will also be required to re-start operations. So that valuation has three parts: 1) the value of the existing equity, plus 2) a CN liability that is on the books, and 3) the impact of future funding (and the shape it takes) that is also still required.

Now, let's say we (hypothetically) chose to fund re-start entirely through a CR and we raise $50m in new equity (say, ~835m shares @ 6c, being less than the total required $57m, but less than the peak cash drawdown of $40m), then total equity is now valued at $117m (1,950 m @ 6c). On the day after CR is would be split as $67m existing embedded equity value + $50m attributable to freshly raised cash at bank. Under this scenario were are valuing the equity in the entire company knowing that it now has the cash required to re-start operations, whilst still having the same CN liability.

Even though there are now a much greater number of shares of shares on issue than previously (i.e. 1,950 v. 1,115), there is also $50m in the bank. In the very short term it should (theoretically) not make any difference in the value that the market ascribes to each share. But we know that markets are forward-looking beasts and over time, as that $50m is spent (i.e. converted from cash into physical works to support an operational re-start), the market will access whether it is actually retaining value within the business. If it doesn't, then the share price will slide.

This was very simplistic example because the are many other things that will also influence the SP, but hopefully that demonstrates my point.