It just doesn't stack up. Suppose that the get the $6.3m and all the unsecured creditors get paid out at 1c the company is trashed.
Let's look at the numbers.
Currently VXL has 199,016,214 shares on issue. Assume the RI issue covers the $6.3m to secured creditors then 630,000,ooo shares are issued (total 829,016,214 shares and 315,000,000 options @ 1.5c). Then the creditors get paid out at 1c that's a further 600,000,000 shares (total 1,429,016,214 shares). We still haven't got any money for the $7m additional plant and also $5m working capital is required ($12m total). In the 2015 annual report plant and equipment was said to be worth $8,554,08 - you would be lucky to get 50% of this in a fire sale (say $4m), you may get something for the customers offtakes (say $1m) but that's all - $5m maximum. This is confirmed by Chimarea not allowing the debt to go beyond $6.3m. Restricted cash is now $1,080,000 but this cannot be accessed as it is a bond against remediation after the the mine has been closed.
The issue is that assuming the RI is successful and the unsecured creditor debts cleared we still have to find $12m to have viable company; we also have 1,429,016,214 shares on issue with 630,000,000 1.5c options. To raise a further $12m VXL will need to issue another 1.2 billion shares at about 1c (we now have 2,629,016,214 shares on issue and 630,000,000, 1.5c options). At 1c a share this values VXL at $26.29m and the options cap the SP at 1.5c; it's simply not worth it.
The alternative outcome is for VXL to go to the wall and do a deal with the liquidator for about $3m - $4m - current SH would get nothing, the unsecured creditors would also not get paid and after liquidator fees Chimeara would get about 50% recovery. If the deal was done in association with LML & SER then only the money paid to the liquidator would be spent. The new consortium could easily raise another $12m (LML were budgeting $43m) and LML/SER would have a plant and also have Kookaburra gully and Uley as assets.
I will NOT be contributing to the RI - IMO it's money down the drain
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