Hearing a lot of anger and understand it to a degree.I have been...

Hearing a lot of anger and understand it to a degree.

I have been around the block a few times and thought I'd throw out my 2cents into how I think things might have gone down and why I am disappointed but OK with it all.

3 weeks ago RNI had a market cap of $75mm and a whiff of copper and some OK gold intercepts on a fairly small tenement. They have some real professionals and arguably one of the better hopes of finding something really worthwhile in Doolgunna BUT they are also one of the more highly capitalised companies in the region with not much cash behind them.

Miles and Co agreed to buy Fortnum from BlueCrest for $35mm in cash and stock in a competitive bidding situation against some major players and won. I would like to think that BlueCrest awarded RNI the deal because they see the upside in taking RNI stock as partial payment.

To raise the $20mm for the purchase they needed to go out to some larger players because its a large amount to raise for a small company and I think they hit major resistance. Shady et al I'd like to think that if they'd approached you or I we'd have been able to fund it but sadly I doubt we could have. The professionals would have weighed up the large market cap and the prospective purchase and said no way at 60cents. but at 35cents I can see buying -
1.2mm oz gold resource
$50m gold plant
$14mm in working capital
and a lot of good exploration ground as worthwhile and STILL having a market cap of $95m (at 35cents)

Its worth noting that Talisman who is right next door to RNI have a market cap of $45mm and cash on hand of $35mm!

I was a little shocked to hear that the price was 35c (was expecting 45-50) but can see how it came about given that RNI had to price by Jan-20 or risk losing the deal. A convergence of timing, large amounts of money and competition.

Miles is a class operator, his way of giving something back to shareholders is the rights issue on the same terms.

Miles is a class operator and anyone who thinks otherwise should not be holding his companies shares. I have no doubt that he struck the best deal he possibly could. Don't forget Miles is the single biggest shareholder of RNI and wouldn't shaft himself and don't forget that David Jones who vended the original RNI land into the company for an option of 20% of the company (yes 20%) has redrawn the agreement for something less so the deal can happen, don't you think that he'd have the absolute most to lose and yet he has renegotiated?

The only thing maybe they could have done different was set up a separate company for the gold mine?

If you ask me, RNI is stronger and better than before, I wish there were only 200mm shares and not closer to 300mm but as I have said before I'd rather have less of something than more of nothing (but hope).

Hers's to a great 2012 and beyond for RNI.