ASX rules require,very correctly,that when options are approaching their exercise date that all option holders be notified to that effect.Whether the options are in the money or not does not come into it.Just because they are out of the money does not mean that the whole matter can be allowed to just disappear into the the ether.The process has to be brought to a formal conclusion regardless.Thus taking into consideration the low SP,the board nor anybody else would expect the options to be exercised...the board is simply following a mandatory procedure.
That is one side of the coin..following the rules. The focus really should be on the other side...what the board intends to do. The alternatives which they have before them are:
1)Remain powerless(low SP)and allow the options to lapse,thus denying the company of the capital inflow.(quite probable).
2)Before the expiry date we are to receive a letter,amongst other things,outlining progress in raising finance.Should the news be very good then in theory the SP would head north,the options would be in the money and thus exercised, and money would flow into the company.Sweet.But highly unlikely.Red hot news like that would have been released as an announcement to avoid bringing the situation to the brink.
3)Re-issue the options for the maximum allowable time of 1 year at the lowest possible nominal rate...maximum 1 cent..less would be better.On today's calculations with the SP at.032 this still does not add up...but that is not really the point.The point is that it buys time and keeps the options alive for another year.With all the uncertainty out there,and regardless of what we are being told by the Fed.the POG could go anywhere over the next year.Nobody knows,but one does get the feeling that the POG has been manipulated downwards to protect the bloated $US.Should the POG come to life again, so will the SP, as will the options.
Its a real gamble..a stab in the dark.For a nominal outlay some may take it(I would),and some may not, for very understandable reasons.
Despite all the gloom and doom I have always tried to stay focused on the excellent resource which we have and not be side tracked by the "noise".We are still in with a chance be it through bank finance as originally planned, or failing that possibly with Chinese money,a friendly merger, or heavens forbid a hostile takeover.But some way, somehow I feel confident that MYG will survive.The resource is just too good to let go.
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