re: the australian anyone out there...
Here you go
Regards Cobby
Creasy deal has Legend fans exiting Robin Bromby 03nov04
SHAREHOLDERS in gold junior Legend Mining are baling out of the stock after learning Australia's richest prospector has done a deal to take control of the company for a comparative song.
Legend was yesterday at a 12-month low, its price slumping to 5c compared with a high of 24c in March. Mark Creasy, who made his fortune selling the Bronzewing and Jundee gold discoveries to Joseph Gutnick for $123million, has renegotiated the terms under which he will inject his Gidgee Resources gold assets into Legend.
In the original deal in September, he was to get 20 per cent of the company. But under the new agreement -- which followed due diligence -- he will acquire 54 per cent of Legend, moving to 66 per cent if all options are exercised.
Initially, shares were to be issued at 7c but the new terms allow Mr Creasy to get his shares at 4c, the deal being announced while Legend stock was 7.7c.
This news would not have been received well at KTM Capital, which took clients into Legend in March at 18c a share and at 7c in September.
KTM was a sponsor of the Legend float, just as it was with Selwyn Mines which collapsed last year. The finance house answered calls with a recorded message yesterday afternoon.
A financial report for the quarter issued by Legend on Friday suggests the latter placement was the only thing that kept the miner going in that period.
The September KTM placement was worth $1.54 million. Legend recorded an operating loss of $3.6 million for the three months and was left with $1.26 million in cash as at September 30.
Far East Capital managing director Warwick Grigor yesterday issued a severe downgrading on Legend: "We see no justification for holding shares in Legend given the failure of the company to deliver good results for shareholders and what we view as deficient continuous disclosure compliance." Far East predicts Legend will record losses for at least another quarter.
Gidgee Resources holds 2000sqkm of leases in the Yilgarn region of central Western Australia that surround Legend's ground. Legend operates the Swan Bitter underground mine northeast of Sandstone and has been drilling to extend the life of that mine.
As it was announced in September -- and the basis on which KTM clients took their second placement -- Mr Creasy was to sell Gidgee for $3 million paid in the form of 42.8 million shares at 7c each. He was also going to subscribe $5million through a convertible note with any conversion also done at 7c.
But Legend has announced Mr Creasy would instead get 75 million shares at 4c each for Gidgee, as well as 75 million options exercisable at 4c.
Thus 42.8 million shares have become 150 million.
The convertible note now has a conversion price of 4c a share and, in addition, one attaching option for each share -- this part of the deal swelling from the original 71 million shares to 250 million shares and options.
"This promises to be one of the most spectacular blowouts of issued capital by an Australian junior for some time," wrote Mr Grigor. "Was the company so close to financial failure that it was boxed into a corner, relying on a deal it thought it had, but was screwed on final renegotiation?"
Legend's register, which held 170.6 million shares on September 30, could swell to 606.7 million under the new deal.
LEG Price at posting:
0.0¢ Sentiment: Sell Disclosure: Not Held
