Hopefully it is for some big power play acquisitions - however, it is of particular concern how shareholders here seem to be finding all sorts of reasons to 'justify' the capital raising.
My counter- thoughts on some of the posts here:
No - it was perfectly 101, 201,301% better for the company to have raised money at the highs. The idea that it is great that they more easily raised prices at 2.9c is simply flabbergasting - there is no sound principle to doing so. There's a reason many mining companies rattle the tin when opportunity strikes during a commodity price rout or hitting some good news. Finding it easier to raise cash at a lower price is not a key reason to justify a CR.
Dilution:
By nature this will be dilutive, and the majority of raising price targets are hit or even broken through on general public trading. It is more so the exception IMHO not the norm for a company to trade at a premium to raising price..
@reu - I would have to disagree with the vast majority of what you've said throughout this thread. It seems like you're looking for a reason to justify the CR more so than what this could logically spell.
I'd also disagree with the logic behind your calculations: you would have to have some pretty big assumptions to apply 6.62% as a percentage against the 59.7m market cap to imply that the share placement's "value" was 3,952,14 resulting in $3,050,071 of premium "value" generated. If management could argue that successfully to shareholders they could probably sell ice to an eskimo.
Also - you are forgetting one or two things. 137,931,034 is not 6.62% of current ordinary share allotment.
137,931.034 is $4m @ 2.9c. The further $3m raised is via 103,448,276 additional shares. Total shares to be allotted would be 241,379,310 which, as a percentage of the 2,084,716,668 shares pre-placement x 59.7million market cap , by your logic and calculations would be $6,912,375.69.
In other words a $87,000 "Premium" placement.
I can't even remember , and I can guarantee you the share price will be valued at a much more mathematically different model than my limited corporate finance brain can compute. Oh, and throw in a few hundred grand or whatever it is the corporate advisers and finance houses will clip off that $7m and you are effectively, by your simple calculations at the total opposite of a premium.
2,084,716,668 shares at 3.3c also implies a theoretical 68,795,650.04 market cap, which by your same calculation theory (adjusted for my correction to the total shares to be issues in your calc, in order to raise the full $7m) that the value of the 241,379,310 shares issued is worth $7,965,517.23. So you are now selling at a loss/ "discount".
Which makes more sense, otherwise your placement would be technically at 3.3c NOT 2.9c.
In the end this calculation is completely primitive. There are shares issued from pre 3c days all the way to poor souls who are in at 6-8c with the option conversions or even on-market purchases. Try averaging out the value of the shares on a straight and equal basis and argue to them that this premium is at a slight premium to 2.9,3c, or whatever you want to calculate. It just isn't. And is pretty ill timed.
Again, let's see what they're using this money for. I'm sure it will be explained away with general acquisitions and working capital that will fund the multiple streams of income we will hit. The problem is, this increases the urgency for eventually delivering on this blue cloud potential. Cash burn already is high - no matter how people justify it with the old 'burn money to make money', however time has gone increasingly further by with 'strategic' acquisitions but nothing of the money making commerciality the company needs.
The longer it drags on and the more money raised, keep in mind it will soon be 2.5 billion shares once performance shares are issued and the like. 2.5 BILLION. I think everyone seems to gloss over the massive dilution they're taking on. TO see the 10c party reached again (I'd like to too) - that's a $250m market cap. At a 30 x speculative tech P/E that's 8.3million in net profit, NOT revenue. Big asks.
(20min delay)