Retail ownership of Rox is now down to around 40% and will be lower by the end of this year.A guide is Ora Banda, with retail on 20%.
The total number of shares issued is now around 600m and that will grow further with the options to be exercised and probably another CR at FID.
If Rox had chosen a fair distribution of profits from the price of gold increase, the Rox share price would be at least 30 cents right now.
The 39% dilution was grossly unfair and a slap in the face for long-term holders who propped the company up, buying into CR’s not always to make money but to support the company.
Retail holders also supported Rox when the reputation of the company was trashed.
Didn’t present at the last Diggers and Dealers or couldn’t?
While shedding a crocodile tear for retail, Phil Wilding says giving the profits to instos was important for the company.
This is the paradox.
Bad for us and good for the company.
Wilding is right in so far as insto ownership suggests credibility to professional investors and funding bodies.
When Rox goes to fund its mine later this year the private equity ownership will be a big plus.
The market cap of Rox is now growing with some 600m shares on the registry and that will also grow.
The increased market valuation because of the additional shares is another negative for us but a plus for the company when it comes to funding the mine.
Many lenders do not loan to small companies with a sub $200m market valuation.
Funders become more enthusiastic about a stock once it's included in a major index.
It’s entirely possible that Rox could become an ASX 200 member this year.
We need the value of the company and our shares to grow faster than the dilution and there are good prospects for that.
There is also a limit to dilution when private equity owns so much a company that dilution hurts them as much as retail.
That’s when the free loans and royalty loans against production come into play.
The Step Up Drilling campaign has a long way to go although it’s likely that the first 3 drill holes completed before Xmas at United North and Kathleen were dusters (I would love to be wrong).
As such Rox is not obliged to report them under the ASX continuous disclosure regulations.
If these results were good Matt Hogan (CEO Venus and Rox director) would not be selling on the market as he is now.
But this is a big campaign with 6 rigs at Youanmi
The focus is now on Pollard for the next results.
Deep Pollard under the original mine and in the corridor between Paddy’s and Pollard is undrilled at depth is far more prospective than Kathleen and we should get the results soon.
Meanwhile, the gold bull is roaring and the potential metrics of the Youanmi mine just keep getting better.
The Youanmi project is increasing in value fast.
If the Board and Dennis and Hogan in particular, can hold off on more dilution of the share registry we should see large gains in the share price.
My opinion
(20min delay)