ballooning cash costs...... again!, page-12

re: priority offer watso has previously given this matter some thought - and this is what he wrote - (see after summary)

in summary

ISSUED capital of new company 500m shares
___________


1 for 6 pro rata issue to shareholders 40m shares

1 for 3 issue of free shares 80m shares


shares issued to rsg shareholders 120m shares


rsg still hold 380m shares or 76% of the issued capital

it does not get much easier than this - watso will send the account for his $5m fee (as consultant to the float) to the company

the above scenario, will ensure a sufficient shareholder spread, give all of the benefits to the shareholders, raise the required capital, and allow rsg to keep about 75% of the company

<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

anyway - this is what watso previously wrote - he previously indicated that the shares in the company over reacted to the news:



"my guess, would be that the new company will have an issued capital of about 500m shares, of which 114m will be issued to shareholders. this would leave the parent company with about 77% of the shares. an issue of 1 share for every 6 shares held, will be made to shareholders, and this will raise $7.5, and require he issue of 38m shares. the company will also issue for FREE, shares on the basis of one free share for every three shares held. in effect, this will mean that for every 1000 shares that a person holds in rsg, that person will have 500 shares in the new company , for which he would have paid $33. on listing, the shares would probably trade for about 30c - in which case the 500 shares would be worth about $150.

the above, would ensure that the company would get a sufficient shareholder spread for the new company, from among its present shareholders, the holding company (ie rsg) would hold between the stated 70% and 80% (see mining news report, which was posted by jkim1078), and give a nice return to shareholders

going by my scenario, then a person who might have bought 10,000 shares at $1.50 in rsg (yesterdays price) - ie $15000, will end up with 5000 shares in the new company, for which he subscribes a further $330. these shares will sell for about 30c, or a total of $1500

so going ex entitlement, according to my scenario, the shares should fall about 10c