Hi guys,Okay so this post is due to a number of interesting...

Hi guys,

Okay so this post is due to a number of interesting points raised by various members of this forum. I must say in particular I would say this post is born of curiosity pertaining to what this forum is thinking, and how I feel about it. As usual, if you have time to read my drivel, then I appreciate it all the same, and thank you.

The SPP and the recently conducted Placement are very intriguing to me as what we all know is $0.055 is an extraordinarily low price for a stock already down in the doldrums. A 20% discount to market is always going to raise some eyebrows, and draw scowls right across the investor-scape - justifiably so. I feel we as investors can make two obvious judgments based on this offering:

1. Clearly there was no interest at a higher price than this, otherwise the issue would have been higher;

2. There is, however, still interest in the company, otherwise no-one would have bought into the placement, least of all institutions and sophisticated investors.

These judgments are both fair and obvious and are less subjective, and more statement of fact. Patterson's as a company have a reputation of not supporting the companies they conduct capital raisings for, and so for me the final judgement I can make is that they BELIEVE the SPP will be close to fully subscribed. This is the part that intrigues me the most.

My claim about Patterson's is justified through the overwhelming evidence at public disposal, rather than a subjective tirade over their inadequacy as a supporter. There are a list of companies who have endured what we have in the past whereby Patterson's opted out of the Capital Raisings at the last moment when the share price dropped. WDR no longer deals with Patterson's after their last debacle, and we have already seen that happen with CTP.

So why does Patterson's continue to bother with CTP? I understand there must be some form of relationship there, however the only benefit of underwriting the stock comes when subscriptions are closer to 100%. Yes they receive payments and so forth, but those are nullified if their clients do not take up the SPP. They will be stuck with $5m worth of stock at $0.055 with no potential gain to be made. I would suggest that they have some idea of the interest within their own client base regarding the SPP and the take-up thereof.

Now I will admit that is obviously an assumption as I have no direct line to all of Patterson's clients, however they do not want to be saddled with stock that they can't get rid of due to unimaginably low volumes on the buy-side. Their losses would far outweigh their gains if they were to sell down the SPP if they got stuck with the underwriting shortfall.

The only other possibility is that they finally, ACTUALLY believe in the potential of the company, and are happy to hold this amount of shares and see the upside of a strike at surprise. Highly UNLIKELY but I suppose for the purposes of a fair assessment, it was worthy of consideration. This is my reasoning, and for now I will stick with it.

Let me look deeper.

The benefit of the SPP to the investors is that it will not be lodged for a while. The likelihood that we will be very much into Surprise by the time funds are required from the investors will give them a decent look at the oil-shows at Stairway, and I hope a decent core sample is cut and examined by the time this occurs. With a similar result to the one we already achieved in Surprise-1, I would suggest the company will be trading closer to where we were pre-placement, and again the SPP provides an invaluable discount to the investors... even those who do not wish to hold beyond the final results of Surprise. There will be equal opportunities for wary investors to sell, and optimistic ones to buy. Patterson's is obviously counting on this, and believe it. I in many ways feel their logic is quite sound, and this seems the best way for jaded investors to make at least a little something back on all the hardship they've endured from CTP and the roller-coaster ride we've been on.

So I ask again, who is legitimately considering the SPP come the cut-off date in late October? I am unsure of the dates, but I do know that investors are to be given 1 month, and since we are in mid September, by the time the documents are issued, we will be in late October for the payment dates. This should give us plenty of time for preliminary results, and some kind of Share Price renaissance.

I would like to hear your thoughts everyone. Your logic is always greatly appreciated and counterpoints are equally accepted.

Thanks for reading.

RB