Ann: Share Purchase Plan Offer Booklet, page-11

You are correct Sweetsound, unfortunately it would seem that some companies have less foresight than others. It means that sometimes a company should consider doing a capital raising even if they don't immediately need the money, especially if things are booming in the market, because their capital raising will succeed, but if they leave it for longer, then there will inevitably be a downturn at some stage, and doing a capital raising at that time might give them problems, like here.

I have therefore come to the conclusion, which may be unpopular amongst some, that a company should seriously consider doing a capital raising at times when the market for it's commodity is booming, regardless of whether they need the capital right at that time or not. I'd call it risk mitigation. Some shareholders might not be happy with that, but look what has happened here and at the other company you mentioned. Good risk mitigation is good management, and it's good insurance going forward.

NML will have a problem here now, because they won't raise any money from the SPP. The question then is, what do they do? They will need to initiate discussions with their major shareholders, and perhaps even go cap-in-hand to banks, but with rising interest rates, even if the banks agree a loan, the interest rates are going to be higher than the last 3 years.

The one thing they will immediately need to do, and which any good management would do, is cancel some drilling and go into a capital preservation mode. They could look at M&A as well. They are going to have a problem, and they will need to be creative. I'd hate to see them have to put Mt Carlton on care and maintenance for a couple of years.

I think they may have been surprised by the increase in AISC from that which they estimated.
They may be able to hit up someone like Macquarie bank for a small $5 million loan.

It's going to be interesting to see how they report a failed SPP and what they'll do as a result.
But, let's be positive, it hasn't failed yet, so let's see what happens.
I've been through this before on many occasions with other small cap gold stocks, and the only time I've really worried is when the directors start resigning, because that is not a good sign. As far as I can tell, this board is pretty locked in and solid at the moment.

The other thing they could do, is cut back on the exploration for the next year, and just concentrate on mining the higher part of the reserve, at least that would give them time, and timing might become very important.

Hopefully, going forward, they will have learned about the timing of capital raisings, and perhaps adopt my advice above, regardless of whether it is popular at the time or not.

Cheers,
Gw