IMO, the problem is not so much the take-up rate (not surprising...

IMO, the problem is not so much the take-up rate (not surprising considering the terrible market conditions that currently exist across the board in the small cap resource sector). The problem is the following:

"...the Company reserves the right to place the remaining Public Shortfall Offer New Shares and Attaching Options within three months after the Closing Date (15 August 2023)."


Having the shortfall hang over our heads for the next three months will likely suppress the SP for that period.

Over the years, I've seen this play out many times with small cap resource companies. And it usually doesn't go well. A company has a large shortfall, and the management team reserves the right to place the remaining shares over the following three months. This overhang weighs on the SP which in turn makes it less likely the shortfall shares will be taken up.

In GRL's case, few retail investors will be willing to buy on market much above the current price while there exists the possibility of an additional 29M+ shares+options coming onto the market at the Entitlement price. And because the SP is likely to remain flat, the chances of selling the shortfall shares/options are also low. (I.e., the shortfall shares/options overhang will act to keep the SP low, and the low SP will act to make the shortfall shares/options less attractive to potential buyers.)

It becomes a self-reinforcing problem: why buy on market when almost 30M shares+options could potentially be issued in the next three months? and why buy the shortfall when there is no interest from the market?

The likely outcome is that the GRL SP will, for most of the time, remain under $0.045 for next few months for no real benefit as, three months from now, the bulk of the shortfall will likely remain unsold (due to the low SP), and the result will be largely the same in terms of the amount of capital raised for the company.

IMO, unless GRL already has potential buyers lined up to take up the shortfall, the best course of action now would be for GRL management to announce to the market that it has reconsidered and has decided that the Entitlement Offer is completed, and the shortfall shares/options will not be issued. Cap raise over. Best not drag it out any further.

We now have sufficient funds to complete our announced drilling campaigns and take us into 2024. Put the cap raise behind us and move on. That way the SP will be able to react to any good exploration results over the second half of this year. Onward and upwards!

Anyone care to share their thoughts on this issue?