this is a good deal folks, page-52

Hello Pewal

The full statment directly from the announcement, in relation to the fee equivalent is:

"In consideration for providing the Equity Facility, Pala will receive a fee equivalent to 1.2% of the facility annually in the form of PENOC options (based on 30 day VWAP calculation) in staged tranches; 47% of the options to be issued upon the execution of the Equity Facility agreement and 13.3% on each of the four following anniversaries."

It is quite clear in "the execution of the equity facility agreement" which means concurrent with the signing of the agreement by all parties - that is what execution means, as opposed to the drawdown of the facility, which may be in 3 months, 6 months, 1 or 2 year's time - or never. However, PALA is still entitled to the commencement of allocation of the PENOCs as soon as the agreement is executed.

The more important point I made, is that the allocation of shares and the free attaching options of 1 PENOA for every 2 shares issued, actually costs PALA and the sophisticated investors 5.15 cents per share taking into account the free 1/2 option for each share - not the premium of 7.5 cents as claimed in yesterday's statement. A clever way of bundling the deal. The initial impression is that the cap raising was done at a premium - it was not.

If I bought 10000 shares in PEN and they gave me 5000 PENOA's for free, what would I value it for? Based on yesterday's close - $1010 ($760 for the shares and $250 for the options). The options closed perhaps a little stronger relative to the SP yesterday, and at a share price of .075 cents, the relative PENOA price in the past has been around .028 below the SP - so .047. So, by my original assessment, the value of the deal is .075 + .047 and at this level the same exercise would be:

10000 x .075 = $750
5000 x .047 = $235
Total value = $985
I would pay = $985
Investors pay= $750

I really think this is the more immediate point, as once understood by traders, it puts a different value on the share price.

I have a significant position in both shares and PENOA, and like posters here, love the PEN story. I will definately be looking to increase my position, once the dilution is absorbed into the share price.