I'd have thought the attaching option was part of the deal with...

I'd have thought the attaching option was part of the deal with the cap raise. These investors would be expecting their free option, a bit like buying a holiday package - they give you the airfare but say bad luck about the accommodation - you'd want your money back.

The company can issue 15% without shareholder approval, last AGM shareholders gave them approval to issue a further 10%, 25% in total.
$6m @ 7c = 85.7m shares + 85.7m options
25% of 791m SOI = 197.7m
So they are well within their limits, so I'm not sure why they need shareholder approval?
Possibly because the options are in the money? (ie below last traded price)
I'm not totally up to speed with asx rules, too lazy to look it up.

Chuk I believe you participated in the placement, did they tell you before you signed up the option issue was subject to shareholder approval? By that I mean on the contract you signed, not the Dear Investor letter.