Hi Mike,
I love the idea of this, but does it actually make that much sense to dilute by a minimum of 347M options (that are about 20-25%, of ordinary shares, and options on issue as of now?), (to avoid dilution of 86M which is about 6.5 ish% of those same heads plus oppies). Obviously this offer is going to existing holders, and given the price, it's not a dilution for those that only hold heads, or those who convert before the rec date.
Given the chance that it may not cause the masses to convert, as many would not be in the money ATM, there is a possibility that they do not even raise enough to cover the loan amount. that seems a lot of risk to avoid, a 6.5% dilution? (Unless of course they have assurances from much of the top 20).
Something that goes against my argument, is that they have to pay it down in 12 months anyway, so that cash has to come from somewhere.
The narrative that they will try avoid bumping the SP before they can pay off the loan, is an enticing one as it implies that there is very good news on the horizon, but I am worried about weighing your hypothetical when thinking about converting early (it was not advice obviously - just a hypothetical, and hopefully one posed in good faith).
I really do want them to be playing chess, while most are playing checkers, but it seems more likely that this a proactive move to sure up their cash position, incase there is a period of turmoil in the markets before the Feb expiry date. If this is the case, that might mean that there is no amazing news coming short term?
Unless they do have a handshake on the big end converting, and then I would love to know about that! Is that something that we could ask management? I imagine that if it is not in writing, it could not be mentioned/announced to us plebs...
Thoughts very much appreciated from all, and if my maths or assumptions have missed something, please correct me
"the three specific items that are not to our ultimate advantage (covered under the conversion rights and redemption terms) are:1. redemption election is only at TNR's discretion in the first 7 months2. If within the first 7 months the 5 day VWAP is greater than 3.8c the financier can elect to receive shares rather than cash if TNR elects to redeem3. If for anytime within the total 12 month finance period the 5 day VWAP exceeds 5.1c the financier can elect to be repaid in shares at 3.8cSo whilst we all would love the shareprice to rise (and a number of factors including BullionFX, drill results etc may see some strength appear) if the price hits the key 3.8c 5 day VWAP the financier potentially takes a big slice of equity.So my guess on the latest entitlement issue is to raise funds to payout the facility in cash while we are sitting at a lower price and avoid the above potential scenarios as a conversion scenario would see another 86M shares issued and most likely dumped on market (can't see the financier as a long term investor).Anyway, that's my thinking (and why I'm so bullish on the current Oppie Entitlement offer) hence my previous comment of seeing how it plays out over the coming weeks.Here's the ink to the ASX announcment covering the terms i refer to above" 
(20min delay)