It depends on the terms of the notes. If they are given a % rate...

It depends on the terms of the notes. If they are given a % rate interest coupon and are sold at a price which is decent, then this is fine. These convertable notes give the noteholder a right to an interest stream and become a derivative financial instrument which can be on-sold and which carries a certain interest bearing yield. They also, by virtue of their ability to convert to FPO's, allow exposure to the eventual (we hope) astronomical share prices to be seen in the future, with the added benefit of interest along the way. These then convert to fully paid ordinary shares 1 for 1 after a certain time. Eg; AXO's con notes were sold at 95% with a 7% coupon and convert 1 for 1 in 2010, as per the number you were sold mid last year. Their conversion rate into FPO's isn't determined by the share price at that time.

If a board sells an instrument over their own company which converts to an equivalency of shares in money terms on maturity (ie; a $200M converting loan) then yes, its a license for shorting. Clearly its not the ideal way to go about financing your company as it gives the power to the note holder whose best interest can be secured by shorting so he gets more shares per his initial risk.

Clearly GT is si milar in some ways to the Michael Kiernans of the shark pool which is the ASX. He was on the board, he was involved in the inancing, and now he has given CMR a lifeline (similar to MK's behavious with MON) and now The Coffe House Group or whatever it is, has a fixed and floating charge over the assets of CMR. Which, dare I say it, is the Browns Sulfide Project.

GT now, pending a disastrous debacle with respect to the start of production at Browns, owns Browns Oxide, Sulphide, blah bla blah. Great way of stiffing the Chinese out of their deposit, one must say. Thanks, shareholders and financiers, for getting GT a nearly functional mine he can now pull out from under your chin because it needed a bit of money.

This is shameful Monarch-esque behaviour from yet another paper-thin patsy-filled Board which bends over and grabs ankles for their rich benefactor of a chairman who gets to shaft everyone and run off into the Bahamas chortling.

Stuff investing in CMR. Glad I bailed at $2.70, this is a joke.