Originally posted by prawn_man
The link to "Fresh Equities" (which was posted today), gives the details of the Credit Raising being offered to Investors. I was a bit surprised, but have calmed down a bit. My reasons are as follows. I've held shares in a few small-cap metal stocks that have ahd capital raisings this year, and everyone of them has been different. In the most recent case the VWAP was based on the share price 5 days
after the offer was closed. It meant that shareholders were in the dark. They had to transfer their money for new shares without knowing the price of these shares or how many shares they would get, until about a month after the CR was first announced. It was a diabolocal act by that board and their second cap raising in 12 months, so I sold all my holdings.
In comparison, the board at CCZ seem to have already calculated everything. According to "Fresh Equities", sofisticated investors are being offered shares at 2.0c (which CCZ say is a 4.75% discount on the last traded price of 2.1c). As for the options, the investors will receive options of 1 share for 2 shares at 5.0c. They state:
"
Options are included at 1 options per 2 shares at a $0.0500 strike price, expiring 36 months from the date of issue."
It means that investors have 36 months to pay for the options, & if they take them up, pay 5.0c per option. So these options are at a premium to recent prices. Also, "Fresh Equities" says that the capital raising aims to bring in $0.75 million to $1 million. So the dilution of CCZ's market cap, which is currently $12 million, is about 8%. The funds will last for 6 months or so, which should give CCZ the time they need to get the copper stockpile moving. Finally, investors have 3 days to apply, which means that the capital raising will be quick.
Based on these points, and if we can believe the details given by "Fresh Equites", I'm going to reserve my judgement. I'm not happy with the rapid plunge in shareprice, but if they report some good drilling results within a week or two, the share price may bounce back to +3.5c by Christmas. Let's hope, and good luck and hold tight. It remains a vey good prospect, amigos.
No one argues that a CR was necessary. In fact I'm okay with a CR and I'm okay with it being offered to sophis and I'm okay with options being used but...
The price is at a 20% discount to the 15 day VWAP (0.024665c) and there are free options which would have been in the money in September after the first announcement on Phase II drilling announcement.
Using the closing price on Thursday is smokes and mirrors bullshit to try and water down the discount. Why not say 2c which is a 5% premium to the intraday low of 1.9c. What a deal for shareholders offering a CR at a premium to the price!
If you exclude this week which I think has been clear manipulation by management to drive the price down and strike a lowball offer for their sophis mates and take the ten day VWAP from last Friday (0.028856c) it's at a 40% discount.
Alan clearly waited until after the AGM to pull this deal. He knew he ran the risk of a first strike. It's really dodgy and I think he's a slimy director and I'm still in a frame of mind to put the questions to ASIC. I'm going to give him the opportunity to talk me out of it should he return my call.
PS your 8% dilution is incorrect. They will be issuing 50m new shares and 25m new options. 75m securities on top of 580m outstanding is 13% dilution.
The exercise price should be at least 10c for three year options, given they are freebies probably more.
(20min delay)