MRC (ASX) Ann: MRC Secures Funding Support for Growth Strategy

Originally posted by Harris541: ↑

I am starting to think that there is a bit of back scratching going on here. Having a major shareholder that mgmt can lean on whenever needed is hugely advantageous, they even stated it months ago. Something along the lines of - we have no problem raising funds when we need. So it would make no sense for them to market the company as AU mining want cheap shares. And then mgmt might not care about a high share price as they get funding whenever they need and they continue to get more performance shares at SP lows. Both parties with so much invested would unlikely care about short term lows and only care about 5 to 10 years potentially. And execution of the strategy. Plus there is the ex CEO selling.

@spid81 - nice theory on AU mining. I hadnt thought of that. I just cant make sense of all the nonsense on these threads. And another interesting view on the potentially poor quarterly coming up. I think it points to some of these issues and fixing of long term issues and actually making substantial progress takes a lot longer than mgmt communicate. I dont think this is any different to most small caps though.

I do have one problem with this CR. And that is it says $4.3m of the CR will be used for the Graphite anode pilot plant. BUT... the critical minerals grant they are expecting to finalise in Oct is for a graphite anode plant for Munglinup and DFS. The CR funds will also allow the processing of Skaland graphite but that doesnt explain what looks to be a big double dipping of funds. I would like the company to explain this.

My conviction in the company still remains strong. Good they have significant money now to fund the strategy. Hopefully the selling pressure stops within the next year (I think it could last a while yet). I will not be participating in this CR. I want to see the company deliver on some items in this strategy and if I want to invest more and it is at a higher SP then I am fine with that.

I got lucky with EGR, as I got in about 6 months before the great rise a while back. I see some similarities to that but I think I might be in a lot earlier and might need to go through some pain over the next 1+ year or so. I think this company will see significant gains but there are a lot of head winds at the moment. 1 - the market environment including bear market, inflation, potential recession, significant gas and oil issues. 2 - selling pressure and we are all guessing when that will end. 3 - a lot of different streams of work that the company has highlighted and is working on. I see this as a short term risk as that is a lot for the company to deliver. I hope they dont become a jack of all trades and a master of none. I dont think this will happen but it is more likely to effect how quickly they can deliver the value of each item as they have too much going on. Good example is MCC and the material progress that was expected in Q3. I hope they at least update us in the quarterly. Just focus on a couple of important projects and nail them.

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Hi Harris,

I know the Australian Government CRCP grants required the company to spend the money on the project first, i.e once the works were completed (spent $4.3mil), the company fills out a form to send it off to the Government, they check the costs then refund the company the money, I assume this is why MRC are raising the $4.3mil from shareholders to get these works in progress.

The other likely scenario is The pilot plant and testwork is going to cost $8.6mil where MRC pays 50% and the Government Grant covers the other.

I really don't know why companies bother to offer a discount for capital raising, you see it all the time that they offer an entitlement with a 15 or 20% discount to encourage investors to take up the offer, yet the SP falls back to these levels within the day.
Why don't they just offer a CR at 9c and give investors 1 free option at 15c for every 3 shares they take up. or some other incentive, The SP isn't likely to decline the 15-20% and it gives the company some back up for funds in the future.

I am grateful MRC didn't enter into a convertible equity arrangement, I have seen these before in stocks I hold and the SP falls significantly.

QTR report - It does indicate the September QTR was poor, which is why AU mining needed to invest $1.7mil prior to the QTR ending. I am disappointed we won't be able to see the QTR result prior to making a decision on taking up our rights.
I guess the one positive we have from AU mining offering the majority of the funds for the CR, they have never shown they are willing to sell shares on market to keep the SP under control, I think we have MC to thank for the low SP (along with poor PR) if he doesn't take part in the CR, we will see a change of substantial shareholder notice from him and if my calculations are correct his holding will drop down to 7-8%.

Sorry @Peppie I didn't want to put words in your mouth, I was overly simplifying the comments you had made previously and was too lazy to go hunting for your post with the exact terms you used. GMA Garnet's declining grade is still a good outcome for MRC, when we are currently raising funds to significantly increase our reserves, capacity and grade.

BTW, regarding one of the companies you mentioned previously, I think I know why they will see a higher garnet price (in their financial study) than MRC proposed finished products, they appear to be going further down the value add by sizing garnet where MRC appears to be producing a finished product of all sizes, I wouldn't have thought it would cost MRC that much more to install decent sizing cells to offer Garnet in the different sizes to increase its revenues.