Hi @nicolas40.Thanks for your post. I was curious to see your...

Hi @nicolas40.

Thanks for your post. I was curious to see your comment that a capital raise isn’t technically possible till the AGM on Nov 19th.

I don’t think that’s strictly correct.

1. Under ASX listing rule 7.1 a listed company like TSO can offer ‘Placement’ holders up to 15% of our outstanding capital. This was taken advantage of by the company when we had our CR back in June.




2. After the CR, we had the following capital structure (taken from the Entitlement Offer Prospectus). Note the total placement shares issued=15% of the shares currently on issue.



3. Ordinarily, that would be the limit...

But in March this year, in response to the COVID-19 pandemic, the ASX increased the 15% cap to 25%. This was designed to assist listed companies in raising extra capital during these uncertain times.

What this means practically is that TSO can offer to placement holders ANOTHER 10% of our shares on issue WITHOUT shareholder approval. The caveat being that if TSO did this, then existing retail holders would have to be offered something commensurate such as pro-rata non-renouncable shares (similar to June) or the ability to participate in a share purchase plan (SPP). This way, retail holders wouldn’t theoretically suffer from the dilution affects of the raise.

4. This ‘extra’ 10% is only available to be utilised till the 30th Nov.

So what this means for us is that TSO can potentially have another CR before the AGM. But would they? IMO it is very unlikely. There is still too much potential positive news to come from our drilling campaign. SP appreciation has been sensational as the market has awakened to the potential of El Zorro.

In other words, why raise now when the opportunity to have a higher SP with less dilution is on the table?

M8