placement strategy

My take on the share placement as a current holder.

This stock started last week with an SP of 13c. Getting a placement at 15c is not a bad result.

Any stock with so few shares on issue and in early stages of exploration is going to issue placements. It's not a bad idea to have spare cash instead of just enough, so topping up seems like a good idea.

There has been suggestions that they should have waited until the SP gets higher then raise, that is a high risk approach. What if the SP isn't higher in a couple of months, or what if the next exploration work at Loongana isn't overly successful. The SP would be lower and they would have much less chance of raising money.

From their recent announcements they have stated that:

From the annual report, the Loongana drilling programme "...is planned for completion during the December quarter of 2009."

For the Narracoota project, announcement 8th Oct. "...a significant exploration programme to explore for
DeGrussa style copper/gold mineralisation will commence in the December quarter." and

From the annual report "...With so much of the Narracoota tenement soil covered, geophysics and drilling will form the basis of the exploration programme for the current year."

From the September qrtly activities report, "...During the current quarter, Richmond is scheduled to complete the Loongana drilling programme.
In addition, conclusions regarding the exploration potential of the Narracoota and Throssell project areas should be reached.
The Company will continue to review, and where appropriate make offers for a range of promoted and generated projects."

The Sep qrtly cashflow report anticipated outgoings of $380k for this quarter, but it seems from the news flow, that the decision to explore Narracoota during this quarter has been made since then, so more money is required now. This could be interpreted as an intention to get moving on Narracoota while SFR fever is strong. If so, it's a good plan.

Or perhaps there is a new project. Admittedly, more info would be appreciated.

In relation to the placement, check out ATI, they placed 100m shares at 3.5c on Thursday and dropped from 3.9 to 3.8c on Friday. IMO opinion RHM's placement is minor and totally expected and should not have a significant negative effect.

Management could alleviate any negative outcomes by issuing a clarification of the utilisation of the placement funds, or as seems likely, by issuing announcements regarding the re-starting of drilling at Loongana and the exploration for copper gold at Narracoota. Hopefully near the sthn boundary where, 1km from its border there is "...the old Cashman copper mine that produced 7t of copper ore grading 16.5% Cu." (from 8th Oct announcement).

Any upcoming announcements detailing the commencement of further exploration work, especially at Narracoota, will immediately outweigh any perceived negatives from the share placement.