That sounds like an appeal to fairness, Olympian. And the argument appears reasonable on the face of it.
But I think there is a big hole in your line of argument.
If Thomson decides to offer the same terms to existing shareholders as it did to Lind, that would result in the number of shares outstanding almost doubling, rising from just under a billion to almost two billion.
When a company decides to double the total number of shares outstanding in a capital raising, it is effectively slashing the value of pre-existing shares by half.
In other words, you are robbing Peter to pay Paul.
And what's the benefit to shareholders? Issuing nearly a billion shares at 0.001 would raise less than a million dollars. That's a pretty paltry sum considering that existing shareholders will see almost 50% of the value of their old shares wiped out.
The reason I am stridently opposed to the company generating a large numbers of shares is not due to numerophobia on my part. Instead, it is because I have previously researched the consequences of listed companies substantially increasing their number of outstanding shares. The aftermath of such dramatic moves is far from encouraging.
The share prices of companies that experience blow-outs in their number of shares outstanding usually struggle for years afterwards. Many companies never recover.
Over the past week, we have seen a surge in the silver price, and a significant jump in the gold price. I think it is likely that precious metals, and particularly silver, are set to continue to climb in the weeks ahead.
The intensity of fury following the attacks from Gaza is comparable to that which occurred after the events of September 11, 2001. One key difference is that the events of a week ago occurred in the heart of the Middle East, raising immediate questions about this volatile region's oil supply security.
We can thus reasonably assume that the oil price will continue to climb higher in the weeks ahead, and if so, that bodes well for silver: the silver price, of course, tends to shadow that of oil.
In such an environment, why would a company with silver and gold assets want to issue a large numbers of shares at the lowest price possible?
The aim of any capital raising should be to generate maximum funds with minimal dilution. Generating nearly a billion new shares and then selling them at the lowest level possible is the opposite of this.
If you are really concerned about fairness for existing shareholders, what Thomson should be looking to do is strictly limit the number of shares at 0.001c issued to established shareholders.
There are surely other ways that Thomson can even out the deal, for example, by offering shareholders of generous options in lieu of shares.
The rising trend in the gold and silver price we are seeing at current is a godsend for Thomson (and that's not a word I'm given to casually throw around).
Needless to say, it would be an utter folly if the company were to issue a billion shares at a piddling share price in such a propitious environment.
In response to Philw's comment-
I suspect that you may be misreading the situation. Reading over the announcements of recent months, I get a sense that there is some manner of a transformation in motion.
For example, as noted in your post, there have been directors leaving the company; however, there have also been directors joining the company: James Fox in May, Povey in August and now Kevin Lynn (it is curious that Lynn was with Silvermines prior to the Bowdens acquisition in 2015, as Scimitar noted in the other thread).
Essentially, I think that the company is looking to acquire some shiny new asset. I'd guess that the asset in question is likely to be the Mt Carrington tenements that were previously owned by White Rock.
But regardless of what they acquire, the question is, how are they going to pay for it?
It could be via the issue of a mind-boggling number of shares at a rock-bottom price, however, even the issue of a billion shares at a tenth of a cent would only bag the company a million dollars, which isn't really much if you are looking to purchase a major project.
So if my suspicions are correct, and the company is indeed looking to purchase a major new project, that would seem to imply that the management are confident that they will receive the $3 million from Warwick in the months ahead.
It might be purely coincidental, but it is interesting that the article from The Australian noted that the Catsoulis mansion is being sold for an amount comparable to what Warwick had agreed to pay Thomson for the Texas project.
(20min delay)