Ann: Pause in Trading, page-187

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Robo.T

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23/10/18

19:29

Post #: 36230573
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Originally posted by HAC30 ↑

Originally posted by Zestfulmocha
Respectfully, you and I have already had this discussion clear.png refer previous threads

Essentially it replaces the beed for capital funding AKA CR so instead of trading hard dilution for capital we trade it for a liability, which may be turned into hard dilution at premium in future state - good outcome IMO and no im not saying cash assets = cash debt, i’m talking practically for project funding and shareholder interest, not a balance sheet figure

Just IMO, you don’t have to agree, everyone has their own perspectives and strategy
Well the initial $20m funding is to repay previous indebtedness but only if DFS/Decision to mine comes through, we can disregard that for now. Not payable unless decision to mine takes place.

I think the issue with this debt is that its more than the current market cap. A conventional CR at a discount is generally done for a fraction of the value of a companies market cap, hence less of an issue as SOI doesn't increase that much.

Tranche 1 - $5m - Conversion 25% premium at 5 day VWAP before & after drawdown - Essentially assuming a VWAP of say 2.2c (above where we are now) you'd be looking at about another 220m shares excluding the ongoing interest payments the lender can also take in shares.
Tranche 2 - $10m - Conversion 50% premium at 5 day VWAP before and after drawdown - Run figures on your own VWAP but I'm gonna assume 3c, you'd be looking at another roughly 220m shares excluding interest payments.
Tranche 3 - Not gonna bother including this yet.
Once you take into consideration all the shares potentially issued to MGI by the time you get to the point they need to then go and raise capex were talking double the current SOI before tranche 3 and the required capex dilution.
Can see why the market isn't thrilled. Minimising dilution is paramount.

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dollar for dollar, you'd rather a CR as discount than optional future dilution (if we go to mine only) at what will have been a premium? I don't understand the negative here. The $value is high, but so is the capex? Exact same $value we would have had to CR, so it's a moot point whether it's more than our MC or not, IMO anyway. The fact they were able to get someone to sign up to this instead of just doing a CR is the impressive part.

i'm not saying debts are a great thing, nor dilution, but they are a reality of doing business as you know, so i don't know what better outcome would be? CR for $5m at discount and see what happens?

VEC Price at posting: 1.9¢ Sentiment: Buy Disclosure: Held
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