Ann: Share Purchase Plan to Raise $25 million, page-166

Well this small 4% dilutionary placement has certainly caused a stir, mainly by the noisy minority I’d suggest.

I think most would agree, looking at our cash balance ($33m Sept 30) the last placement at 40c was prudent. No doubt this $25m is needed so history will show it too was prudent.

When they released the updated Reserve report last February they stated the approx capex that would be required going forward, this was before the LOMP was released.

In Summary:

US$5-6m processing plant and associated infrastructure, tailings storage facilty(TSF), and satellite pit dewatering (done)

US$15-20m for haul rd & prestrip at least 2 or more satellites

US$30-40m Main pit cut back, dewater

US$5m short-medium term TSF - long term being assessed

As you can see the prestrips, haul roads, cutbacks are expensive, anyone who has done their research would be aware of these figures.

Only the company has the full picture as to projected cashflows, minimum cash balances for the $50m facility they’re negotiating etc etc. You either trust them or you don’t & I’m not suggesting blind trust, so far they’ve ticked all the boxes - so I trust them. The bulk of my shares were bought post Morila at 15c so I’m very happy with management. I even managed to pick up 100k at 59c yesterday - what a great Christmas present from Dr Anderson & loose hands.

Even if the sp does come back to 58c, I can’t see it staying there for long. Smart money has done the math & knows this was a drop in the ocean. So much news is coming our way as we demerge & get into the main pit.

Do you sell $30k worth at 61c to fund the SPP?

To me that would be very dangerous as you just don’t know how big the scale back will be. Last time they accepted over subscriptions - that was initially for $30m however we had less than half the shares on issue then & probably half the shareholders.

It’s interesting reading some of the comments on this thread. Some complain about the dilution (4%) yet then say we should receive attaching options. Look at the current options that have just expired. The company gets 15c then issues a share worth 60c. How dilutionary is that? yet somehow that’s good, but raising at 58c is bad.

Others complain about the gains the likes of LTR etc have had. As @ozblue pointed out, as a gold stock we have done very well (incidentally gold is back up above $1800 today), as a lithium stock not so well. That is why they are demerging - it’s not managements fault. The reason we own FFX is because it’s undervalued, the moment it reaches full value I’ll sell. What are the chances of FFX going up 4 bags in the next 12 months compared to say LTR with a $1.3b market cap or PLS with a $6b market cap. I know where I’d put my money.

If you’re invested for the short term, by all means vent your frustration, but don’t expect holders you still plan to be holding in 6 months time to have much sympathy.