To all those complaining about IGR not doing an SPP.Last time...

To all those complaining about IGR not doing an SPP.

Last time round (Feb 2009) when IGR did an SPP, they could have raised a maximum of c$23.6m (based on the $5,000 limit across 4,716 shareholders). And this assumes that everyone of those would participate at the full level.

IGR actually only raised $5.8m. Now assuming that IGR allowed shareholders to participate at the $15,000 level, I think they would struggle to get $10m. That is obviously way short of $40m they wanted. Given the timeframe, the only way to raise a large amount of capital is via placement. An SPP doesn't quite cut it. I don't want IGR management spending all their time working on ways to raise capital.

Now... I do agree that there should be *some* SPP for existing shareholders, but it is not the key part at this stage.

The remaining capital required can come from debt. The feasibility report suggested total capital required was $64m. Given the equity raise was for $40m, and some of this would be for drilling to make the countryside look like swiss-cheese, I reckon IGR will look to get debt funding of c.$30m (maybe $40m, but I don't think they need that much).

I also think the equity raise would have been a pre-requisite for any debt raise, hence the equity raise was done first.

I think people should see the equity raise as a massive positive as this removes the roadblocks for development. I think the debt piece will almost be done, and given the equity raised, hedging will probably be able to be reduced.

Overall I think Chris Cairns is an absolute class act, who knows exactly what he is doing. In these tough economic times I think he has done the right thing. I'm not overly concerned that there wasn't an SPP.

If you want to buy more shares, buy them on market (I did notice today that you could buy the options at a discount to the headstock) and at the moment there is no time premium in the options at all.

Also, the number of shares on issues makes no difference to whether someone wants to takeover a company. Total market capitalisation is the only thing that is important.

Cheers
Marv

DISC: I hold IGR shares