No necessarily. See prospectus, page 9. LMG is paying $1.5M to Ord Minnett to handle this raise which also includes risk of underwriting.From announcement 13th July, in the end they ended up involuntarily wearing $5.4M worth of shares so allowing $0.5M for running the issue, $4.4M short.
I guess you can say from that, we can expect Ord Minnett will do a big dump to get their money back asap. When the share price rises, Ord will trickle sell essentially keeping the share price below its full potential.
This has happenned because the share price fell well below the issue price - and that happened because of very poor communication and management. Announcing production on the 13th May whereas in fact it was only completing wet commissioning producing about 200kg of MgO composite.. They will not be in production until they have the 3 shifts operating 24hrs/day. They have not been producing MgO since that few hundred kg's announced on 13th May.That's why the share price has been hammered.
When they announce 24hr production, the share price should rise and I expect that's when Ord will begin to make their move to recover their money.
LMG Price at posting:
4.3¢ Sentiment: Hold Disclosure: Held
