RM Shares

People,
Having not been able to attend the recent EGM in Sydney and having not fully read the EGM resolutions thoroughly, I decided to do a bit of research on how many shares RM currently holds. This was instigated also after reading the posts written on here since last Monday about RM and the selling of his shares.

The 3Y announcement that came out on 09/02/15 stated that RM sold 16,253,283 shares for a total of $205,826. After the sale it states that RM owns (indirectly) 661,667 shares.

http://www.asx.com.au/asxpdf/20150209/pdf/42whdtlr2y576f.pdf

The reason given for this sale to stockholders here phoning the company, was “personal reasons”. This of course has been greeted by howls of outrage and derision, beating of chests, and conspiratorial posts aimed at the CEO amid questions of its legality re insider trading etc.

What should be stated is that Resolution 6 was passed at the EGM and resulted in the approval of an issue of 35,714,285 shares to RM with an option of another 35,714,285 shares that are exercisable at 2c by the end of March this year. See the announcement below:

http://www.asx.com.au/asxpdf/20150130/pdf/42w9v8tmyd0lhs.pdf

The resolution below outlines what was passed in detail. I have highlighted the relevant parts for readers.

RESOLUTION RELATING TO THE ISSUE OF SECURITIES TO A DIRECTOR

Resolution 6 – Approval of issue of 35,714,285 Shares and attaching Options to Mr Ryan Mount and approval of issue of Shares on exercise of Options

That, for the purposes of ASX Listing Rule10.11 and for all other purposes, the Company approves the issue of 35,714,285 fully paid Shares and 35,714,285 attaching Options to Mr Ryan Mount on the terms and conditions set out in section 9.9 of the Explanatory Statement and approves the Directors to issue 35,714,285 Shares on exercise of those Options on the terms and conditions set out in section 9.9 of the Explanatory Statement.

8.6 Information for the purpose of ASX Listing Rule 10.11.1 (Resolution 6)

The following information is provided for the purpose of ASX Listing Rule 10.11.1.

(a)
The maximum number of Shares to be issued 35,714,285 Shares together with 1 Option for every 1 new Share purchased (35,714,285 Options in aggregate).

If Shareholders approve Resolution 6, the issue of 35,714,285 Shares on exercise of the Options will be excluded from the calculation of the 15% limit under ASX Listing Rule 7.1.

(b)
Issue price of Shares $0.014 per share (total amount raised being $500,000).

The Options will be issued for nil consideration.

(c)
Terms of the securities.

The Shares will be fully paid rank pari passu in all respects with the Company’s other Shares on issue.

The Options have an exercise price of $0.02 per Share and expire on 31 March 2015 and will not be quoted.

Refer to Annexure B for the terms and conditions of the Options.
The Shares to be issued on exercise of the Options will be fully paid and will rank pari passu in all respects with the Company’s other Shares on issue.

(d)
Allottee Mr Ryan Mount.

(e)
Issue Date and Date of Allotment.

If approved, the Shares and Options will be allotted and issued immediately after the date of the meeting, but in any event not later than the date being one month after the date of the meeting.

(f)
Intended use of funds raised.

The funds raised from the Shares are to ensure operational readiness for the recommencement of exploration activities on Isabel Island, Solomon Islands, to fund litigation proceedings in the Solomon Islands and for general working capital.

http://www.asx.com.au/asxpdf/20141230/pdf/42vs43d4qgmzdv.pdf

So, all the bluster that has gone on for the last 3 days or so.

What do the above highlighted areas mean in reality:

1. RM has been approved to buy 35.7 million ordinary shares and 35.7 million options if he wishes.
2. The issue price of the ordinary shares is 0.014c and will raise $500,000 (section b)
3. RM has one month from the date of approval to purchase the 35.7 million shares (section e).
4. The funds raised will be used for drilling, litigation, etc etc (section f).
5. If RM wants the options he has to purchase them before the end of March at a price of 2c (section c).

So he sold 16million shares to get around $205,000 bucks to pay for something. He sold at a loss obviously because he needed the money in a hurry. He knows that he can buy the 35.7 million shares by 27th February (assuming a calender month).

If he purchases these shares then he will have a very healthy parcel (wish I had the same).
He also still owns the remaining 661,667 shares as outlined earlier in this post.

Probably time to stop phoning the ladies at the AVQ office now. Those who have made disparaging posts about the Communications Lady should pull their head in too.

The upshot of all this is:
• we are still drilling
• results are likely to get better
• RM has been approved bucket loads of shares
• Resource still looks likely to be massive
• SMMS are still likely to lose the Appeal

All we really need is that Appeal date from the President of the Appeals Court to start the countdown on the clock.
C'mon Mr President, please hurry up.

Cheers.