Ok so i'm a bit ahead of myself there on the Chinese regulatory approvals. nothing new. Shenghe should have a good handle on the likelihood of approval being granted them, and they are buying here to retain their 19% stake.
So -They wasted millions on the phosphate drilling -They raised at a desperate discount -Contracts are delayed due to translations -Shenghe doesn't yet have approval to proceed
However; -They have now stopped wasting funds on phosphate exploration -They have interim funding -Contract translators sound as if they are close to understanding English -And Shenghe appear confident they'll gain approval
So what is the company worth once approvals granted and all expenses paid with 35% of profit for 7 years? (I haven't bothered to do those numbers but I'm sure it's all there in the quarterly?)
Anyway; Back to the brutal 47% discount; roughly 20c to 10c In very rough numbers, If the market cap is $35m today it was circa $70m pre raising; So a $35m reduction in market cap to add $6m to the coffers, thats 60 million additional shares added to the approx 300m existing, or dilution of roughly 1/5 One fifth of 20c is 16c Is the 10c raising zone a short term buying opportunity? Probably.
Risk is still very much on but the discount looks overdone and even slightly tempting.
PEK Price at posting:
11.5¢ Sentiment: None Disclosure: Not Held
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