As all the regulatory approval boxes have been ticked regarding...

As all the regulatory approval boxes have been ticked regarding Mahalo with production now a certainty – we needed a shed load of cash to pay for our 40% share of costs which we never had to bring Mahalo to production.

A capital raise at this time and the resulting share dilution when the share price/market cap sits where it does would have been almost impossible – certainly unfavourable for all of us shareholders who bought in ages ago and have supported the company over the long term.

The only logical way forward is to exchange a percentage of our 40% of Mahalo for the funding required to pay for our share of costs – commercial borrowing would have been tricky with our market cap sitting where it does.

COI management clearly feel that the long term benefits of a free carry income stream from a smaller percentage of Mahalo plus the income stream from Mahalo North at whatever percentage we end up by retaining – is better for shareholders than the alternatives which at this time appear few.

Once we hit that point and COI is benefitting from an income stream from both Mahalo and Mahalo North – then the company should be valued on a PE basis rather than where we sit today.

IMO – our managements view is that a short term take out is unlikely with all the focus is now being on production – so we put our shareholdings in the bottom drawer and await that time.

Providing we hit the production expectations as detailed in the announcement and we retain a meaningful percentage of Mahalo and Mahalo North – then there are many Institutional as well as Private investors who will want to buy into long term yield especially as overall market conditions and interest rates projections in the short to medium term are anything other than favourable.

Probably not the news that many of us were expecting/hoping but we are where we are and we have to make the best of the current situation.