I think you will find that in the last annual general meeting one of topics for vote was the ability to agree to a capital raising at no more than 15% discount to average trading price over the 5 days before.
As such if 12.7c is right for the average trading price we might be seeing a 11c capital raising.
I think one viable outcome might be a placement targeted towards some ownership from a company like an lg or Sony. Given China's increasing restrictions to rare earth supply there is a reasonable chance that we will see increased costs of the next few years. Given the relations between Japan/South Korea and China have at times been frosty it would make sense for producers with a requirement for rare earth and volatile relations with China to establish their own production avenues.
I know for most of us a potential wait of 4-6 years before a mine produces anything is a long wait. Companies like this will be factoring in increasing demand for smart technology over the next few decades. As such the need for REE will increase. Why not drop what for them would be a small capital outlay into a company with a $70M market cap and an asset valued at over $1B in the last few years to offer some protection of your supply in a few years.
Whilst this could cause some major dilution if we saw say an increase of 50% of shares on offer I would suggest the sp would start to recover because outside of the capital required for mine/refining construction it should remove concerns about cash flow over the next few years and with it some of the major concerns about getting this thing up and running.
Might seem a bit fanciful but if I was an exec at lg or Sony this company would very much be on my radar.
GGG Price at posting:
12.0¢ Sentiment: Buy Disclosure: Held
