importance of rights issue, page-4

Hi 123enen,

you're correct regarding previous WHN cap risings. But this was then and that is now.

I was just pointing out the fact that normally small cap companies use every rise in the sp for an instant cap rising to so called sophisticated investors, claiming then to be well capitalised for whatever developments / drillings / research / trials .... but nothing else then empty promises. This looks different and is not considered to be a "reward" for today because instead paying 11c you can buy the shares for less than half that issue price.
BUT : This cap rising is one of the few that, and I repeat myself, has the word confidence written all over the company sign.

As long as sp is that low I would be a fool taking up the offered options, I use and will use any cash left to buy the shares at less than 5c.

If we apply mathematics then here is the calculation :

Buying options for 1c instead shares for 5 c on market, saving 4c. If sp rises over 10c then options can be converted at cost of additional 10c.

e.g. 100.000 oppies = $ 1000
100.000 shares = $ 5000 ( Next week )

if sp would reach 20 c then

selling 50000 oppies for $ 5000 at 10c ( expected oppie price when sp is 20c ) to convert remaining 50.000 oppies to 50.000 shares, valued $ 10000

Profit : appr. $ 9.000 or 900 %

100.000 shares valued at $ 20.000, Profit $ 15.000 or 300 %

Buying shares now will result in more profit, but oppies will provide a higher percentage gain. The only risk is that sp would never reach 10c.

But PRR has shown us how quickly an overpriced cap rising can turn into a bargain of a lifetime.

Everyone has now to decide what to do. I am awaiting the next news and if my thoughts are correct than we will see a quick and stabil rise to above 10 - 15 c. If not, then I fell for a well structured mirrage. Time will tell but at this stage I am convinced it will turn out as a rewarding investment. Otherwise .....