Split If everything goes to plan and they produce in 12 months then I agree it is a bargain. However for the last 12 months nothing has gone to plan so their is a big credibility gap here.
Without a underwriter this issue will be lucky to get a 50% take-up excluding TRF's holding.
What TRF do is also extremely critical.
It is now nearly 3 weeks since the original announcement of the rights issue and still no details have been released.
To me this is a clear sign that management know that if they announce the issue at 75 cents without a underwriter then the issue will fail.
It would seem to me that TRF dont want to participate but if they dont the issue will fail unless they can find a cornerstone investor. TRF may be assessing how they can raise funds say via selling off ROL plus a equity issue versus finding a underwriter and re-pricing down.
Their is absolutely no incentive to participate. Most shareholders would have seen the share price continually fall over the last 7 months and would be reluctant to participate. Why throw good money after bad.
There are currently plenty of other opportunities to pick from.
The share price can still go lower. The only thing I can think of which could push the price up in the short term would be a favorable issue to a new corner stone investor.
The biggest issue is that the cost structure is too high. Cash costs of $94 just makes the risks too high For a large investor to take a big position. In 2 years time if prices fall back to $100 then the mine may have to be closed.
TYX Price at posting:
75.5¢ Sentiment: None Disclosure: Not Held
