Imo this is worse than the finance CR. Why? This marks the third...

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magmabaron

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29/09/22

11:12

Post #: 63939370
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Originally posted by MIStragic: ↑

Red 5 Limited (RED or the Company) is raising A$60 million by way of a placement of approximately 375 million shares at A$0.16 per share, with the ability to accept oversubscriptions (Placement). The Company will also offer a A$6m share purchase plan at the same price as the Placement.
Funds raised will primarily be used to fund King of the Hill (KOTH) process plant expansion and feasibility, exploration and resource drilling and working capital to support the ramp up of production at KOTH.

The Offer Price of A$0.16 per share represents a discount of 15.8% to the last close, a 23.0% discount to the 5 day VWAP and a 28.0% discount to the 10 day VWAP.

Obviously, I'm NOT happy, but its only A$60m, and this is to fund process plant expansion, presumably to 6mtpa+. The conference call today will be watched with great interest dare I say. This is not worse than the CR associated with the funding - that was a pre-condition of the banking syndicate as was the hedging at A$2150/oz. The banking syndicate would not be interested in such a small raise, and if it did, onerous caveats would be imposed. The major shareholders have indicated strong support for the CR not surprisingly.
The decision to go ahead with this was obviously made before the overnight POG rebound. Its yet to be seen if this rebound will continue into a new gold bull market. This should be a minor problem, not the tip of an iceberg .... IMHO .... DYOR.

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Imo this is worse than the finance CR. Why? This marks the third farking raise in a row where they raise at the bottom. They do not learn? Surely their finance team can look forwards? Gold prices in AUD is healthily in their forecasts made more than a year ago. And the last raise was at 16c...

RED Price at posting: 19.0¢ Sentiment: None Disclosure: Not Held
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Imo this is worse than the finance CR. Why? This marks the third...

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