theory- another drawdown starting?, page-3

The drawdown facility is basically where we issue shares to an institution at a 7% discount to raise some money. Basically like a placing but at less of a discount than usual.

It doesn't help the SP per-se, as the extra cash in the bank is offset by the greater number of shares in issue. However, while the drawdown is taking place Duchess short the stock which makes it difficult for the SP to rise (hence if the theory is correct, that would explain the drop today).

Once the drawdown is complete, Duchess will stop shorting, which allows normal share price action to resume. And if there's more buyers than sellers (as there has been the last 2 times this facility have been used) there'll be a quick move up over the next couple of trading sessions.

Think about it- since the 9p days, the only times the great rise has been temporarily halted has been when the drawdowns were going on (we did the first drawdown at 9p, and shortly after rose to 16p. When the second was called, it dropped to 13p, only to rise to current levels shortly afterwards. If the third drawdown has been called, that explain the drop from 24p to 21.5p today- however as we've already seen, the drop is only temporary, and is followed by a large move up when it is complete).

What it boils down to is we might have a bit of share price weakness this week as Duchess shorting means there's temporarily more sellers than buyers. But if you ride out the storm, according to recent history, you should be well rewarded.

Of course, past performance is not a guarantee of future results etc etc. But there's plenty of news due, we've got an extensive drilling campaign coming up from April onwards, and will be sorting out Trinidad soon enough (maybe Columbia too if that rumour is to be believed?) so it seems a decent bet to me that the same thing will happen this time round.