Ann: Capital Raisings and Commencement of Drillin, page-3

re: Ann: Capital Raisings and Commencement of... Well, now looks like there is support at 4 cents and plenty of interest above this.

Stands to reason, as the higher it goes and the better support it gets the more the shares are worth after the placement.

If you buy the share at 4.8 cents (say 100,000 shares) this costs you $4800. Attached to this is the right to buy another share for 1.8 cents - a 3 cent profit from the get go. Added on top of this is an in the money option - one for every two.

So, at the moment of paying $4,800 for your 100,000 stock, it actually has a deferred value of $8,400 (nearly double!) because of the rights issue (100,000 shares x 4.8 cents, 100,000 shares x 3 cents profit on rights, 50,000 options in the money nominally worth 1.2 cents - but would trade for considerably more).

Not massive volume for a penny stock, but the most ARX has seen for a year - and there is next to none available for sale.

From a risk perspective, the break even point with the rights issue is around about 3.2 cents if you bought at 4.8 - and it looks like firm support is in place at 4 cents to shield a loss (based on shareprice + rights profit + underwater option value = -1/(4 x (shareprice - strikeprice)).

So - buying now you have a large built in buffer of profitability...