Cobra Resources - London, page-8

I decided to move on from Austin Powers avatar theme, and hereby a new one starts.

I've been pondering about the best way to hold some interest in Cobra - with the low MC it is a cheap entry. Cobra is listed on the UK market under COBR, and I've held them for a while now.

One of the things I hold dearly is the ability to hold an not dilute too much.

Generally shareholders get diluted through a CR or a SPP. Shares are generally given at a discount - those who get the new shares get that discount, and the existing holders get to see shares given to others at a discount - diluting existing shares. I always check the respect level for shareholders during a CR when I look at a new company. When I was looking at MEP (as part of JV) they did a SPP and had to announce bad results for one tenement, and with that they offered that any shareholder may withdraw from the SPP. With a discounted JV % and integrity management I bought the first parcel.

If the CR is done through a rights offer or a SPP, then at least, those who have their shares diluted ALSO receive the discounted shares. I call this Dilutive Neutral. Your existing shares are worth a little less but hey the new shares came at a discount, its a lose & win. neutral.

THIS is so important to me. Now with Cobra, I don't know if that will be the case, not through lack of trust but they are listed on the UK markets and that classifies me as an foreign investor, making me not eligible for any future raises. Reading between the lines of my previous post, Cobra will need to raise significantly over the years to come. Thinking about the possibly dilution makes me sadder then Beaker...

Am I better off holding Cobra as part of ADN or outright ? Currently I hold outright

Outright: With the small MC, I get to hold a significant part of Cobra - but I will be diluted over and over.
Through ADN: It does NOT matter how much Cobra dilute. They could add 10Billion shares it doesn't matter as ADN will always hold 25% of the tenement value. However, ADN MC is 20* Cobra, and the ADN only holds 25% (eventually), so my $, my effective exposure to Cobra is literally only a few % of what I hold now.

So that is my dilemma: Any thoughts are welcome - and absolutely any decision I make is mine and mine alone.