General Chat / Discussion, page-10398

Here's the problem that Tim is going to be facing now with the share price at 0.005 - https://www.asx.com.au/content/dam/asx/documents/listings/hamilton-locke-raising-capitalguide.pdf - notably companies can only raise 15% of the companies listed capital per 12-month period via placement/non pro-rata. Assuming we ignore the previous raises and start the 12-month period from here (they could have already exhausted their placement capacity!!). Also assuming a discount as is typical for capital raises,which with traded price of 0.005 would need to be 0.004. That makes the market cap for this exercise $19.2m. 15% of that gives a maximum raise per 12-month period of only $2.9m. Their average cash burn each quarter is $5.1m for the past four quarters. They will need to nearly HALVE their cash burn and have done so 2 months ago just to be able to survive one quarter under the ASX placement capacity.


Now their next option is to go to an extraordinary (non-annual) AGM and get voter approval for another 10%, to take placement capacity to 25%. This would allow them to raise ~$4.8m via placement, enough for a quarter at their average cash burn. This would involve having to face the shareholders and I'd imagine Tim would not be looking forward to this.

Finally, they can use an SPP to get as much top up as they need. The problem with SPP, unless the share price is on a rise, the share price gets sold down immediately to the SPP price and there is little to no take up. I can provide 10s of examples of this occurring in the past year, with VMS and MEI being very recent rare earth explorer examples. I don't think the SPP will bring in a notable amount of funding unless the discount is large enough to force the hand of holders to participate to avoid dilution... at which point you may as well recapitalise the company.

So long story short, the average cash burn vs market cap for IXR is looking very grim under their ASX placement capacity and raising options. Obviously could always be a left field funding announcement..