Hi chuk, I replied to your post the other day because I thought...

Hi chuk, I replied to your post the other day because I thought you were saying our low SP was mainly a result of the under performing small cap resource sector we’re in. From your reply to my post above, that was obviously not your intent.

I think it’s very important to discuss the bad as well as the good, otherwise we’re all drinking Kool-Aid like many other hyped HotCopper stocks. My reply was also to explain why I’m not concerned about our recent SP and to explain why.

If I’m invested in a company and the SP more than halves I want to understand why. For example Lithium stocks tanked in 2023 because the prices of carbonate, hydroxide & spodumene all tanked, if you were a believer in the EV, ESS transition you’d sit tight. In our case fertiliser prices haven’t tanked nor has the price of most fertiliser companies, so our drop is more company specific.

I outlined the reasons I thought were responsible for the drop in my last post, however I’m starting to think it’s not just the soph’s selling for a small profit (they need the options to be voted up) but also many holders are questioning why they had to discount so much just to raise $6m and it took them 7 weeks to do it. Our SP was in the mid 9s, a 7c raise is ok, but throw in an option worth more than 2c (at our last traded price) and they are effectively raising money at 5c. Holders are rightfully wondering if the company is that bad that it needs to raise money at almost half it’s last share price. Holders would be asking what does the market know that I haven’t picked up on? Doubt rightfully creeps into your mind.

Now readers of these threads know it was initially oversubscribed for $10m at 7c with no option attached, that although not ideal is an acceptable raise. We also know HongKong Jason pulled out & they had to sweeten the deal with the option to stop other investors getting cold feet. The documents substantiating this have been posted here, but those holders that don’t read HC wouldn’t know all this, this information has not been released by the company to the public, only to the participants. They would also have limited information on why we went into suspension during the cap raise and possibly think it took 7 weeks to raise that money. This is obviously not the case.

The above 2 paragraphs tell 2 very different stories, 2 different groups of holders, those that aware of the circumstances behind the cap raise and probably the majority who just saw a very steeply discounted raise followed by a big share price drop.

I’m not sure what the ASX would allow the company to release in relation to the cap raise to allay concerns some holders probably have. An explanation as to the circumstances including why HK Jason pulled out would go a long way to restoring confidence. At the same time they could probably update on P4 which is associated with HKJ - we haven’t heard anything for a long time.

As I said in my last post, I’m not concerned at all by our SP, like most readers here I read all the announcements, listen to the interviews etc so have a reasonable understanding of what’s going on. Most investors though don’t do that, they are lazy, at the most they look at the SP daily and read the bullet points in an announcement.

If we get the finance, start construction the SP will look after itself.