what does it mean, page-7

Pretty straight forward really.
40 million raised to keep West Perth alive as RDR head office and to get Meeka on line as an operating mill.Also as part of the 40 million raised the camp and power station will get tarted up and Bligh Capital get a couple of mill of shareholders funds(as if you havent chipped in enough over the last ten years)

Part two and this is the worry.Reed will have a 20 million dollar facility with a credit provider for working capital and a buffer zone for contingency.They will need this because the 40 mil as outlined by Reed is well and truly spoken for.The 20 mill will be used to pay for a working mine and earthmoving contactor who will be blasting and shifting lots of low grade material and waste from the pits.

You might say well they are producing so that will cover costs.Yes all very well but at what cost versus the gold price.The cost to produce is nearly 1100 per oz and then you have to pay for West Perth.

If they do produce 95k oz in the first year that will only net them 20 to 30 million after all costs and even then they will have a 20 million overdraft to be paid.

I just dont know where share holders think they will gain out of this.Reed has no capital growth on its share price,doesnt pay a dividend and keeps going back to the market for more money.

Bligh Capital look like being the next substantial holder of this serial under performer.Most holders will be unwilling to contribute more to a company that thinks it top brass are worth up to 400k a year and be granted shares under a performance rights plan.Reed has tried options before but they could never quite make it in the money so now they give fully paid shares to employees.

Worth noting that Chris Reeds holdings of nearly 3 million shares are in the hands of a lender who would have requested a margin call after this weeks tumble.Maybe the chairman will transfer him some more shares to keep the wolfe from the door as has previously occured.

Interesting to see how many shares the REEDS and other directors take up in this latest raising.