NOTE: The company is in a Trading Halt, so I (or anyone else) can't do anything with this information until the company comes out of Trading Halt - apart from try to organise funds in order to participate.
Ok, I have some more details after listening in on an investor call for the raise.
Please take what I say at face value and wait for the details of the raise to be announced. This information is from memory, so there are likely errors in what I provide here.
The company is looking to raise ~$3.8m @ $0.15c - so a 7% discount on the 20 day VWAP, and a 0% discount on the current price which is amazing. I thought for sure there may have been a discount, and I used 20% in my calculations above, but will update and repost here.
The company has just under $1m in the bank, so this is not a raise being done out of desperation.
The details of the raise
$3m 1 for 5 entitlement offer for existing holders which I believe has options attached (likely 1:1, but I don't know at which price).
$1.5m (or 50%) has effectively been underwritten by Future World who are the largest shareholder in the company.
$800k placement to new investors.
The thing to note here is the entitlement offer is the bulk of the raise, which means the company is looking after the shareholders first and foremost.
I have got a lot of respect for Paul, and I appreciate his commitment to shareholders in this process, which further builds on my respect for him.
How the Funds will be used
- Complete the PFS. Paul reiterated end of year / early next year timelines.
- An initial 1,000m drilling and assay campaign is expected, with the potential to do additional drilling in the event that things are looking good
- Potential funds to do a full second drilling and assay campaign - hopefully there will be time to get an "inferred" DSO resource at Satrokala before the PFS is published. Two DSO resources at 2 projects would be an unbelievable outcome, but maybe it would be better to keep it up our sleeves so we don't get a premature take over offer (I'd prefer we go mining and get dividends for the rest of our lives).
- Working capital and other stuff
Director ParticipationPaul said he will participate to his full entitlement.
Graeme and others have been unable to buy on market due to the sensitive information they have been privy to.
There will be a meeting and vote to effectively allow them to participate in the raise, and they are eager to invest in the company - which is obviously great news, and also a really bullish sign.
The Data RoomBest to let the slides do the talking - please note, this is from a DRAFT of the release, but once again, in TH, so no one can act on this information.
TLDR; 2 offers submitted to the company on Friday, another 2 potential expected in the coming weeks, so up to 4 offers for a strategic investment.The company will be looking to make a decision on which offer is the best by the end of the financial year (30th June 2024).
Investments will likely be at the project level - so only Bekisopa, and not at the company level.
This is amazing because it will likely minimise or eliminate dilution for existing holders. Anyone wants to build a significant position, your only option is to buy on market, and you won't be getting my shares.
If we could go mining with a strategic investor in place who funds the build, they will likely a discount or whatever but this practically eliminates further heavy dilution. I think we could easily have sub 150m shares on issue when we go mining.
That would be unbelievable for Earnings Per Share, and more importantly Dividends Per Share.
The Mining CodeThe company has been in contact with the Ministry of Mines, there will be people going over in May, and there will likely be a request for a "Small Scale Mining Permit" to do bulk sampling.
There has been positive discussions, but nothing is concrete here, so
this is still our biggest risk.
Conclusion
I think that's it.
Sentiment updated to BUY
It has been a long wait for lots of people there have been delays and frustrations, but the progress made has been undeniable.
These are very exciting times indeed, and I will be doing what I can to take up my full entitlement, and I am more than excited about what the future holds for AKO.
There are risks ahead, but I remain confident the team we have assembled will be able to navigate them.
Updated Spreadsheet
By the end of this raise, there are likely to be about 20m options outstanding.
Options aside, we should end up with about 120m shares on issue.
IF a strategic partner funds the whole of the $55m build, we will be golden.
Even if they don't, we will be in a very strong position with extremely low shares on issue.
(20min delay)