Ann: Trading Halt, page-76

It’s important to remember that GLN raised $10m at 50c only in late January this year. Even at that price, we only had to issue an extra 20 million shares, so dilution wasn’t too heavy for a great chunk of money. It also brought Thematica onto the register. Just seven months later, thanks to excellent management from JP, even if we were to “only” raise $10m, at the rumoured priced of $1.15 we’d only need to issue less than 8.7 million new shares, which would increase our SOI by only ~3.55%.

Consider the options here, if management elected to increase our register by the following amounts:

• Dilution of +10% SOI (i.e. an extra 24.5m shares) would produce cash injection of $28,200,000.
• Dilution of +15% SOI would produce cash injection of $42,300,000
• Dilution of +20% SOI would product cash injection of $56,400,000

These are some solid numbers for minimal additional SOI. Compare that to other immediate peers AGY, CXO, LKE, INR, who all have well over 1 billion shares on issue, some approaching 2 billion.A tightly held register is a huge advantage when it comes to raising serious funds.

It will be fascinating to see how big this CR is (I see just now, $50m has been mentioned above), and who comes on. The broker data for the past few weeks clearly shows institutions have been buying in. Clearly us retailers here aren’t the only ones who look at GLN’s market cap verses their resource, and believe it’s undervalued verses peers – even those who may be slightly more advanced.

Cheers,
m