Hi Harris,
I know the Australian Government CRCP grants required the company to spend the money on the project first, i.e once the works were completed (spent $4.3mil), the company fills out a form to send it off to the Government, they check the costs then refund the company the money, I assume this is why MRC are raising the $4.3mil from shareholders to get these works in progress.
The other likely scenario is The pilot plant and testwork is going to cost $8.6mil where MRC pays 50% and the Government Grant covers the other.
I really don't know why companies bother to offer a discount for capital raising, you see it all the time that they offer an entitlement with a 15 or 20% discount to encourage investors to take up the offer, yet the SP falls back to these levels within the day.
Why don't they just offer a CR at 9c and give investors 1 free option at 15c for every 3 shares they take up. or some other incentive, The SP isn't likely to decline the 15-20% and it gives the company some back up for funds in the future.
I am grateful MRC didn't enter into a convertible equity arrangement, I have seen these before in stocks I hold and the SP falls significantly.
QTR report - It does indicate the September QTR was poor, which is why AU mining needed to invest $1.7mil prior to the QTR ending. I am disappointed we won't be able to see the QTR result prior to making a decision on taking up our rights.
I guess the one positive we have from AU mining offering the majority of the funds for the CR, they have never shown they are willing to sell shares on market to keep the SP under control, I think we have MC to thank for the low SP (along with poor PR) if he doesn't take part in the CR, we will see a change of substantial shareholder notice from him and if my calculations are correct his holding will drop down to 7-8%.
Sorry
@Peppie I didn't want to put words in your mouth, I was overly simplifying the comments you had made previously and was too lazy to go hunting for your post with the exact terms you used. GMA Garnet's declining grade is still a good outcome for MRC, when we are currently raising funds to significantly increase our reserves, capacity and grade.
BTW, regarding one of the companies you mentioned previously, I think I know why they will see a higher garnet price (in their financial study) than MRC proposed finished products, they appear to be going further down the value add by sizing garnet where MRC appears to be producing a finished product of all sizes, I wouldn't have thought it would cost MRC that much more to install decent sizing cells to offer Garnet in the different sizes to increase its revenues.
(20min delay)