Ann: Entitlement offer to raise up to $7.62 million, page-47

With the share price close to the offer price many retail holders will be wondering if they should participate in the CR. If they don't this CR will become a test of insto, funds, management, and top 20 holders support for the Youanmi Gold project.

If the CR raises a paltry amount Rox will look silly for raising before the PFS (and diluting our holdings cheaply). On the other hand, if this CR succeeds with major stake holders and others investing in shares we haven’t taken, it will confirm that Rox is very undervalued.

From an insto viewpoint trying to buy on market at volume would force them to pay over the offer price. Buying into the offer also gets them the free attaching options. Best of all they are funding Rox for the next stage of the feasibility studies and for some very prospective drilling described by MD Rob Ryan in his recent presentation. Rox might even drill their district scale high grade lithium find?

It makes sense (and is legitimate) for Rox to have run the CR as a proposal past major holders. Rox would not have launched this CR without solid non-retail support imo. Management will certainly take up the offer as will Hawke’s Point and they could well lift their stake by taking more shares beyond their entitlement. Contrary to opinion here Venus Metals, the biggest shareholder will also take up their entitlement imo. Venus has a seat on the Rox Board and would have made their position on the CR clear from the outset. Venus would need to find $1,134m to take up their entitlement and from their last Quarterly Venus has investments in ASX-listed tradable securities currently at an approximate market value of $1.2M which can be liquidated anytime. With their Rox shares held by Venus coming out of escrow in July, Venus could cover their offer cost and make a tidy profit by selling at a higher price after the PFS plus they would have the free options.

The latest Canaccord Genuity research report has a 50 cps target on Rox subject to further derisking.

That 50 cps target needs a strong PFS with no negative surprises in the metallurgy test work. Taking up the offer at 16.5 cps and selling at 50 cps while keeping the options is a very sweet trade for Venus and for retail holders who also find the recent Rox presentation compelling.