Why reject the option of a quick placement directly after the JORC resource delivery to a few insto's versus the Canadian listing route?
The board have placed the stock "cum capital raising" by their decision to forego the former in pursuit of the latter.
The rationale was explained as the Canadian route providing a broader base for financial support over the longer term than the former and hence was a lower risk financing option.
The short term cost of this strategy is the stock trading "cum placement" until the raising is completed.
Ultimately, the extra dilution created by this option will be confined to approximately 7%; (20% increase in issued shares at a 30% discount to the first option). So it is not a disaster but begs the question, will the Canadian option provide the purported increase in financial support to compensate ELM for the dilution?
With August being the earliest possible date for the CR to be completed, one would justifiably expect little upward price pressure over that time.
The board made their call and the majority of shareholders backed them.
The moving hand having writ, moves on...
K2P Price at posting:
$2.05 Sentiment: Hold Disclosure: Held
