Initial release - "...equivalent to the lower of A$0.10 per share or a 15% discount to the 10 day Volume..."
Latest release - "..(SPP) will be based on a 15% discount to the 5-day average.."
Why the change Andy?? Our latest substantial shareholder took up a placement at 17c in Nov last year. Could it be that they were pretty unhappy with the latest issue which so far is at over a 50% discount to the price they stumped up, no doubt under the guidance that this would be the last time Elk went to market. Is this the reason Andy has changed the terms??? Maybe somone just pointed out that he might get more money. Have we got a job for that person!!
Overall shareholders have been upset that Elk has had to return to the market yet again with cap in hand, shareholders are also upset that the raising was set relative to the shareprice before the initial results of Ash creek and the chance that debt funding will be secured in the near term. A significant amount of the funding sought is earmarked for Ash creek. The requirement for that money is dependant on success at the current well. If it is not economic Elk do not need that money and shareholders could avoid significant dilution. If it is successful then it should be able to be debt funded. Elk had $2mil cash/debt avail at the end of last quarter.
Although not surprised that ELK delivered what appears the worst posible thing at the worst possible time I cant help but think there is more to it. Unhappy shareholders, AGM coming up, either Peter or Tony up for re-election, there is a lot to gain if you can dilute existing unhappy shareholders.
At the last AGM when I was pressuring ELK about the destruction capital raisings did to the majority of shareholders some clown got stuck into me claiming he was very happy with the progress Andy and Elk were making and how he wanted to particicpate in further share issues. I suspect he was thinking placement/rights issue I wonder if he was as excited to see SPP. Looking forward to seeing him at the next AGM....
When I entered, ELK had 38mil shares on issue, looking like having around 133mil at the end of the SPP. I have had approx 72% of my exposure to Grieve and SDS destroyed through bad management.
Cheers
ELK Price at posting:
10.0¢ Sentiment: None Disclosure: Held
