1. Best to raise is when the share price (ie Average Vwap) is as high as possible so as to minimise dilution. Mgmt will know this but there is a certain amount of unpredictability with a stocks share price and there is a fixed amount of time need to raise (ie preparation etc) so sometimes Mgmt mistime it. Ideally, Mgmt need to raise when the Avg Vwap is peaking.
2. Sometimes mgmt will be forced into a corner and be forced to raise at the wrong time this represents a boon for those buying into the raise but a major disadvantage to existing holders... An example of this was when NMR recently raised prior to the announcement of the 4.2bt Jorc. Unfortunate but there hand was forced.
3. If I were in charge I would be ideally be raising shortly after the current news cycle is published by this I mean , Drill results for Phase 1 and 2, Revised Jorc, and scoping study findings are published. If this were the case they would raise in early April I'd reckon. They have prev stated they have the cash to deliver all the above.
4. It is likely that the NMR Share price will be multiples above what it is now by then assuming the that all anns are overwhelming positive. The wild-card to this bullish story is if the world markets collapse and raising finance becomes more difficult. In which case mgmt may decide to take the decision to raise early and take the hit of the possible extra dilution but retain the certainty of having cash going forwards. A bit of a balancing act really.
5. So what its the raise price likely to be you ask? ... Well it depends on the avg VWAP around the end of March assuming no market collapse. Also note that to entice people (ie Sophisticated investors, large investors etc) to cough up more dough the capital raises are done at a significant discount to the Avg VWAP. Usually 10-20% Discount or in extreme cases such as STB recently did a 50% discount
(Note: The Avg vwap can be calculated over a number of days usually 5 - 10 days.)
Personally I think it would be foolish and down right incompetent of mgmt to raise until at least some of the good news starts to flow... unless of course they are cornered and forced to raise due to imminent cash flow problems.
NMR Price at posting:
5.3¢ Sentiment: Hold Disclosure: Held
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