Ann: Transformational acquisition of the Ekati Diamond Mine, page-64

Exactly. Current share price itself isn't a factor. Its the MC expected on relisting you discount from for the immediate ROI for the new investors.

67c raise seems a reasonable price. That would make the registry 50:50 new and existing shares (if I've math'd it good, sometimes I don't).

Paying $231m for a $300m EBITIA asset is such foreign territory for a cap raise that any existing thinking on discounting the current share price has to go out the window. This isn't normal. What you have seen in the past (like the VWAP discount method) will not apply.

Running a few numbers with these assumptions:

• MC of $1b on relist.
• 3.33 x the $300m EBITDA.
• This may be too high given the 6 years of mine life at present.
• This may be too low given the ASX200 average of 14.5.
• This figure will be what the brokers will be arguing about until the moment of the offers are released

On a 25c Raise, you are having a laugh. 57% return for doing nothing all.... just no:

	New	Existing	Totals
Capital	231,000,000.00	104,000,000.00	335,000,000.00
Price	0.25	0.30
SOI	924,000,000.00	346,666,666.67	1,270,666,666.67
%	73%	27%
On relist
MC ($1b)	500,000,000.00	500,000,000.00
Price	0.39	0.39
ROI	57%	31%

On a 67c Raise, new investors would still be getting a 8% return (i.e. about right):

	New	Existing	Totals
Capital	231,000,000.00	104,000,000.00	335,000,000.00
Price	0.67	0.30
SOI	344,776,119.40	346,666,666.67	691,442,786.07
%	50%	50%
On relist
MC ($1b)	500,000,000.00	500,000,000.00
Price	0.72	0.72
ROI	8%	141%

Is PE x 3.3 too high? I can't see how it would be. But the short life expectancy could be a concern + the impending costs of closure and rehabilitation. The long term PE average of the ASX200 is 14.5. So my 3.3 could also be miles too low. Many many overpaid financial analysts will make that decision and advise their clients.

I also give no warranty for my math skills. Probably messed it up somewhere.