Normally, you do see a share price drop to the value (or below), of the rights issue / cap raising.
The rights issue is at 1c. We are already at 1.1c so not far to go. Having said that, reports are due and assays are due, so we may see a pop before the issue goes to market. It is only $4M and is not essential, it is only taking place because of their deal with LinQ. If they raise nothing now, then they have another 6 months to do so (and most likely at a different price). If the offer was fully subscribed, they have asset backing of 0.008 per share of in-situ copper and an effective bank balance of $12M, That gives them a share price of 1.5c with the higher registry based on pure asset value of Kangaluwi and cash.
If the market starts to price in 500kt instead of 200kt, that gives us an asset value of 2.7c (excluding their limestone and uranium), and that still, is with not all of the strike length included for the resource from Kangaluwi. This new price doesn't not count in any of the predicted revenue streams which may be less than 18 months away. It is a fair value (at worst), of their current assets only.
I am buying more, and will continue to do so even if the price does fall further.
ZRL Price at posting:
1.1¢ Sentiment: LT Buy Disclosure: Held
