Looking at ALK's Non-renounceable Entitlement Offer...

Looking at ALK's Non-renounceable Entitlement Offer documentation i see that an Alkane director has set up a trust to purchase any shortfall shares in the entitlement offer for himself, through an elaborate setup:

"Any shortfall under the Entitlement Offer is underwritten by Regal Funds Management Pty Ltd. The Underwriter will underwrite up to an amount of approximately $12.2 million of the Shortfall Shares (as defined below) (Underwritten Commitment), representing up to 11,090,622 New Shares under the Entitlement Offer. The Underwriter has appointed Gandel Metals Pty Ltd as trustee for the Gandel Metals Trust to sub-underwrite its obligations. The Sub-Underwriter is an entity associated with Mr Ian Gandel, an Alkane director.

"A summary of the Underwriting Agreement and Sub- Underwriting Agreement (including the circumstances in which each agreement can be terminated) is set out in Annexure A.
See below for details about the potential effect of the underwriting arrangements on the control of Alkane."


Now i don't know a great deal about ALK, so you can take my comments with a pinch of salt, and they're my opinion only...but the facts are there for all to see and make up their own mind. Shareholders should be able to apply for Shortfall shares in the offer, and be GIVEN PRIORITY OVER UNDERWRITERS in the allocation of Shortfall shares. What ALK directors are doing is BAD FORM in my opinion, and could be a sign of how they view minority shareholders.

Compare this to another mining company (in which i own shares) - Atlantic Gold (ATV) - where management always purchased shares on the same terms and in the same proportional as other shareholders. In fact, ATV's management purchased most of their shares ON MARKET many years ago. It's a good exercise to examine ATV's announcements to get a handle of the difference in their treatment of shareholders compared to ALK's director's treatment.

All in my subject opinion only. Please do your own research and form your own opinion after careful consideration.