why raise funds at such a large discount

Todays announcement indicates that RRS will place 987 million shares at $0.025 per share + one free option for every two shares. This should raise $24.67 million with $20 million received in commitments.

The free options are exercisable at the equivalent pre consolidation price of $0.05 on or before 1 October 2010. This compares with the listed RRSO options exercisable at $0.05 by October 2007 - three years earlier.

Current RRS is trading at $0.028 and RRSO at $0.006.

Given the same strike price but time difference you would say the free options are worth more than the listed options and therefore are worth at least $0.006 per option.

This means this placement is been priced at the equivalent price of less than $0.022 per share ($0.025 less $0.006/2). This represents a 35.7% discount to the existing price.

I suspect most people already realise this but I thought I would point it out anyway.


Regards

SP