Ann: Operations Scale Up - Phase One Dry Plant, page-69

Hey mate,
Thanks for the feedback.
I've done some numbers for you.

At of the last quarterly, we had:
792,970,108 ordinary shares on issue.
305,420,062 listed options on issue with an exercise price of 1c
190,000,000 unlisted options on issue with an exercise price of 0.96c (these were given to the chairman, directors and staff)

Under the current financing agreement with Magna, we will at a minimum (assuming the share price doesn't go below 1c) be issuing 25,000,000 ordinary shares to Magna through the fees and 85,333,332 options with a 3c exercise price. On top of having to pay them back.

Then there is the $2.5 million cash note with Resource First Pty Ltd (which was deferred via $50,000 payment until Jan 16). If we pay it out at 1c per share, we will be issuing another 250,000,000 shares to Resource First Pty Ltd.

So that means, worst case scenario, if the share price stays at 1c, we will have 1.04 billion shares and likely 580 million options that won't be converted.

If the share price is at 2c and all of the 1c options are converted, we will have 915 million shares 495 million options, so essentially 1.4 billion shares.

If the share price is 3c, we will have 1.4 billion shares also, as Resource first will be issued the same number less in shares that Magna would convert at 3c.

So the way I see it, we are looking at between 1 billion shares and no options + no money from the conversion or 1.4 billion shares with either $4,874,000 or $7,374,000 from the 1c, 0.96c and 3c conversions.

A share price of 2c (later down the track) would give us an MC at $28 million by this stage, nearly $5 million in cash from conversions, $4 million per annum in profits, $5 million in assets (wet plant approx). Minus $5 million to pay Magna back.

A share price of 3c (later down the track) would give us an MC of $42 million, $7.3 million in cash from conversions, $4 million per annum in profits (low ball), $5 million in assets (wet plant approx). Minus $5 million to pay Magna back.

Not bad for a worst case scenario.

Hopefully I am not missing anything.

As for a consolidation, it would probably be advisable once the shares on issue go above 1 billion.
Nothing looks trashier than a registry the size of the moon.