surprise surprise increased offer, page-42

Makattack, hi.
First, assuming UCL has its half share of the BFS costs (the rights issue proceeds are supposedly sufficient for that if you believe the management) then the only further possible dilution will come when they raise the Capex.

The level of dilution when they raise the capex will, as I think you already know, depend on whether they need to raise any equity, whether individual private investors will be allowed to participate, whether individual private investors have spare cash and lastly on the level of the share price at the time the equity funds are needed.

One of the purposes of the BFS is to give the company the option of raising debt finance (if available), so the company might not have to resort to a dilutive equity placing. (I think it likely they will need to raise some equity capital as debt financing, although cheaper is more dangerous).

The level of the share price at the time of an equity fund raising should (in theory) depend on how the attractiveness the expected returns from Sandpiper/Meob (e.g. as documented in the BFS by trustworthy independent mining consultants) compare with expected returns on other investments. You seem to be assuming the expected returns from Sandpiper/Meob will be so bad that any equity placing will have to be at our current share price or worse. We won't really know until the BFS is complete will we?

I stand by my comments that the loss of leverage to the project if you accept MAK shares is certain, but the loss of wealth as a result of dilution is not certain if you accept the UCL offer.

I expect people like Seals will probably sell their BON on the market at 7.2 cents and put the proceeds into an application for excess (shortfall?) shares in the UCL rights offer at 0.5 cents thus beating the UCL offer of 9 for 1. That's what I'd do if I lived in Australia. Just my view.

Regards