G’day all,
Just saw the ASX release (28 May 2025) MGU’s Entitlement Offer closed at a measly 22% uptake (69.67M shares, ~$418k vs $1.94M target). Offer’s now void under Section 723(3), with refunds coming. After three extensions (March, May 7, May 26), this is a rough one. SP’s already at $0.004 (down 20% recently), and I reckon it could dip to $0.003 short-term. So, what’s going on, and has the board dropped the ball? The Bad: Low Uptake: Only 22% subscribed, even after the Palmares hype (1.69% TREO, May 6 presentation). Shortfall Offer was just $180k, all directors. Seems like shareholders (us included?) aren’t buying in.
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Dilution from the 312.29M shares (38.6%, incl. 190M for Palmares) is killing sentiment. Governance Red Flags: Those 118.96M shares to directors (Lekkas, Martino, Goodman) and voting restrictions (Notice of GM) scream insider focus. Resolutions 11-13 are vague – what are those extra shares for? HotCopper’s been grumbling about this, and I get why. Cash Crunch: No revenue, burning cash, and now no $1.94M. Palmares (0.1% explored, no JORC yet) and Buena Vista need funds, and alternative financing (Res 6, $10M?) might mean more dilution or debt.• SP Pain: At $0.004, we’re near all-time lows ($0.005 was bad enough). Bearish forecast ($0.008 for 2025) and no analysts covering us isn’t helping.
The Not-So-Bad: Palmares Potential: The REE grades (1.69% TREO, Tb/Dy heavy, scandium 30-65 ppm) are solid, and China’s export bans make Brazil hot. Surrounded by BRE, MEI, EQN successes, it’s not a dud project. Drilling and JORC could be game-changers. Board’s Intent: They pushed Palmares hard (May 5 acquisition, May 6 preso) and responded to shareholder extension requests. Voting restrictions show some governance effort, but transparency’s lacking. Market Context: Micro-caps like MGU are tough – 24% volatility, no coverage. REE sector’s volatile, but the board’s playing a long game
Big Questions:1. Why only 22% uptake? Are we all spooked by dilution or is Palmares too speculative without a JORC?2. Has the board failed us? Pricing at $0.006 was a low blow, and marketing (The Market Link) flopped. But is this just bad timing or mismanagement?3. Alternative financing – placement, debt, or what? More dilution incoming?4. Can Palmares or Buena Vista deliver in 6-12 months to hit $0.01-$0.015, or are we stuck at $0.003-$0.004?
I’m holding a small parcel but getting nervous. Palmares could be huge, but the board needs to step up with a JORC, clear financing plans, and answers on director shares. What’s everyone’s take? Are you staying in, or is this a write-off?
(20min delay)