Firstly this is a total sh!tshow, they have stuffed up big time here, let's not paint lipstick on the pig and call it beautiful..
My expectation is a continuation of suspension at the end of the month, because the 'cap raise' is not going to be easy..
Chapter 7 of the ASX listing rules based on the corporations act comes into play. We have been suspended for more than 5 days in the previous 12 months, therefore we need to cap raise with full disclosure (a PDS acceptable to ASX/ASIC) unless an exemption comes into play...
https://www.google.com/url?sa=t&...er07.pdf&usg=AOvVaw05K13FRyxb-DsH1PXcvdD0Hopefully that link works to ASX listing rules chapter 7..
An exemption would be if the offer price was at least 80% of the VWAP over the last 5 days (exemption 5), plus for not more than 30% of shares on issue. Our VWAP over the last 5 trading days was around 21/22c (I hope someone has the exact number), which means a cap raise at above 17c/sh to get the exemption to apply.
Personally I will not be putting in any more money at anything like that price, just based on the 'word' of management/BODs for a low doc cap raise. They have already raised over $272M which has not been enough to get the mine operating fully, yet the initial claims back in 2020 about the purchase of Morilla were doing it all on cashflow from mining the tailings...
The last few quarters they also were selling ~10,000 oz of gold per quarter, which is a further ~$A150M (6 quarters) on top of the $A272M spent with nothing to show for shareholders.
If they were to try and raise at 17.5c/sh IMHO it will be a complete disaster as trust is gone, whereas a deep discount doesn't meet the listing guidelines because of more than 5 days suspension. Gold price has also fallen which makes the odds of raising within the limits highly unlikely, IMHO.
Only conclusion I can come up with is long term suspension with real chance we have done our dough on this, because the mine still needs an unknown amount of capital to clear the pit of tailings and complete the new tailings dam, plus whatever else we don't know about, all in a falling gold price environment....
Hopefully Resolute or Perseus or the like will make us an offer we can't refuse....
