I agree with your points Makattack. In addition when MIZ did the first part of this transaction (the lease of the gold circuit) they were capped at between $3mill and $4 million. When they announced the option over the acquisition they were capped at approximately $8 million. Remembering these are Aussie dollar numbers and the acquisition was US$5.5 million. This meant they were effectively having to find funding for 70% plus of their market cap. The management has managed to somehow finance the majority of this through non-dilutionary funding with Silverstream and the rest through the convertible notes. So Webral what do you think a fair rate of return would have been on the convertible notes at an LVR of 70 to 75%? That sort of LVR is a risky proposition. I think 18% is actually a fair transaction for all and in fact I’m surprised they didn’t demand more. Regardless of which in my view the management have done a great job of putting together the combination of Silverstream and the notes with very little to work with. They would not have been able to ever raise this sort of money via a placement given the size of the placement relative to its market cap and if they had that would have been seriously dilutionary and none of us would be looking at this with a view to any upside at all from here. In the environment we’ve been in with relation to raising capital for micro caps I for one do not know of a company out there that has done a better deal and the deal with Silverstream in my view demonstrates the belief that they have in both the company’s projects and management.
DYOR
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