GGG has just announced a SPP and it is interesting to compare the terms of the MEL offer with the GGG offer and see the similarities evident.
Shares on issue beforehand
MEL - 337.4M
GGG - 416.4M
Share price beforehand
MEL - 28.5c
GGG - 37.0c
Capital raising to instos. and sophs. etc.
MEL - $10M
GGG - $15M
Pricing of CR issue
MEL - 50M shares @ 20c - discount of 29.8%
GGG - 50M shares @ 30c - discount of 18.9%
Options attached to CR issue
MEL - NIL
GGG - 25M free attached options (exercise price 60c - 10/2014)
SPP issue
MEL - $20M
GGG - $ 5M
Pricing of SPP
MEL - 100M shares @ 20c
GGG - 16.66M shares @ 30c
SPP attached options
MEL - NIL
GGG - NIL
Price change ex entitlement
MEL - 28.5c to 20c - down 8.5c (-29.8%)
GGG - 37.0c to 32c - down 5.0c (-13.5%)
Shares to be on issue post CR and SPP
MEL - 487.4M
GGG - 483.0M (+ extra 25M of options)
Estimated cash backing per share post CR and SPP
MEL - 8.0 cents (approx. $40M)
GGG - 4.5 cents (approx. $22M)
Loans
MEL - negligible (IMO)
GGG - negligible (IMO)
Current cash burn rate estimate
MEL - $3.0M per quarter (my humble estimate)
GGG - $2.5M per quarter (my humble estimate)
Planning
MEL - development of CSG and convential gas field
GGG - development of the Kvanefjeld rare earth element, uranium oxide and zinc field. Intention is to move to 100% ownership (by purchasing outstanding 39%) of Kvanefjeld in October 2012 with the issue of a further 74.8M shares and paying $5M cash. This will reduce cash on hand to around $17M and reduce cash backing per share from 4.5 cents to around 3.0 cents
Both companies have projects with 'lengthy' timelines. Both in my opnion are going to need to raise more cash in the not too distant future.
The intersting thing is that current minor shareholders of both MEL and GGG would appear to have received very similar treatment. MEL minor shareholders may have received better treatment even though it was still second-rate treatment.
GGG minor shareholders appear to have been given less regard than MEL minor shareholders. In the case of MEL the SPP issue was double the size of the CR while with GGG the SPP issue is one third that of the CR.
There was an announcement by GGG on 25/09 to say that Bell Potter Securities had initiated Research Coverage of GGG. In the five days prior to that the shares closed in the 34-35c range. On the day of this announcement they closed at 37c after trading in a range of 35.5 to 39.5c during the day. Two days later GGG announces a CR and SPP with Bell Potter 'handling' the CR issue.
I, like so may other MEL shareholders, believe that the CR by MEL wasn't correctly priced. What is of more concern to me, however, is the continued practise of disregarding minor shareholders to their financial detriment while giving institutions and 'sophisticated' investors a free pass to (what is in most cases) easy money with minimal downside - particularly with CR issues. In the case of GGG free options were part of the CR deal but not for those participating in the SPP. These options may end up being worthless but the downside risk is NIL - it is all upside potential. I believe with any capital raising or share issue, an even-handed approach both as regards pricing and timing is needed and like compuerised algorithmic trading, action by ASIC is well overdue.
Sorry about the rant..... just wanted to share my thoughts.
These comarisons are my own research - don't rely on them for your investment decisions - DYOR.
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GGG has just announced a SPP and it is interesting to compare...
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Last
0.5¢ |
Change
0.001(25.0%) |
Mkt cap ! $7.237M |
Open | High | Low | Value | Volume |
0.5¢ | 0.5¢ | 0.5¢ | $500 | 100K |
Buyers (Bids)
No. | Vol. | Price($) |
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20 | 13664897 | 0.4¢ |
Sellers (Offers)
Price($) | Vol. | No. |
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0.5¢ | 3626406 | 5 |
View Market Depth
No. | Vol. | Price($) |
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20 | 13664897 | 0.004 |
8 | 15262019 | 0.003 |
4 | 16775000 | 0.002 |
4 | 47300000 | 0.001 |
0 | 0 | 0.000 |
Price($) | Vol. | No. |
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0.005 | 3626406 | 5 |
0.006 | 4039880 | 6 |
0.007 | 2663797 | 4 |
0.009 | 615051 | 2 |
0.010 | 1000000 | 1 |
Last trade - 10.04am 25/07/2024 (20 minute delay) ? |
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