I was at first a little surprised by the announcement today.
My expectation is that the release of the upgraded JORC for Seymour and other potential drill results between now and November 2022 will boost the share price. If the share price in November 2022 is likely to be higher than now, exercising later would mean less new shares are issued. Why convert now?
Well it provides clarity that exercising is likely, but economically GT1 was incredibly likely to exerise unless all further drilling results were a dud (and they are not, we already know that). It provides clarity that 80% is owned and there are no cash outflow to purchase the remaining economic interest to get to 80%, but that isn't a good enough reason to exercise now either.
IMO its a precursor to further news flow around development. If no development decisions were to occur before November 2022, why wouldn't GT1 just wait until then to exercise? If they are choosing to exercise now something requires them to be at 80%. This could be the split of costs with ADV for development of North Aubry. These discussions could easily migrate to discussion about when GT1 exercises its option.
Another clue is the last sentence below of ADV release. Is it possible that GT1 is in off-take discussions and can now undertake those discussion on an 80% basis. Just my opinion, but it would explain why the exercising was done now, and not later.
GT1 Price at posting:
90.0¢ Sentiment: Buy Disclosure: Held
