IMO only, the convertible bonds are integral to the Strategy in play at CTP.
DBZ, the only subscriber to the CBonds is a fund manager (acting for ACBO, a pooled managed fund) and has as one of its business descriptions as being a "specialist in special situation transactions of companies engaged in the energy and power industry".
DBZ have essentially invested in CTP via the first bond agreement($7M) and now the second($1M with possibly $49M remaining).
This size of investment into a small cap explorer (with possible huge potential) would in my view make DBZ privy and a player in the CTP Strategy and the negotiations going on ("the special situation transaction"). And the company and JH would IMO need someone on board as DBZ.
In between the 1st and 2nd agreement was the capital raising and the departure of the CFO(to which I interpret as being a clash between the conservatives and the entrepreneurs, JH and DBZ)
The short term strategy is fairly clear, to get the JV partners on board, however the execution would be complex due i guess to the farm-in options and scenarios). There is also now as per the qtly announcement the potential of an acquisition to provide a revenue stream.
So is the cash on-hand going to go towards an acquisition or towards a drilling program in case the farm-in does not conclude satisfactorily?.
I am leaning towards an acquisition but I am of the opinion the cash will be spent on either of the above and when it is, the convertible bonds will be the life blood to keep the company working towards achieving the objective in the short to medium term.
For DBZ, as for all of us there is risk, however imo they are backing CTP and I am following them. And recall that for DBZ to get their 15% of CTP, the SP has to go to 50cents and greater.
CTP Price at posting:
8.2¢ Sentiment: Hold Disclosure: Held
