Personal ViewI will state again that what I am about to write is my personal view on the rights issue matter.
I mentioned in a previous post this month, when someone else posted that they thought a rights issue might be coming, that such an event in my opinion would be a worrying development.
The ANX announcement takes it well beyond just being a worrying event.
For the following reasons.
The directors are no longer just lending money to the company to get it through a short term glich in its cashflow.
The share price has bombed and the underwriting of the issue is at a Maximum price of 10 cents, less than 30% of the price boasted by ANX when it was trying to buy out NIS just a few short months ago.
The company seems to be at the mercy of the group who are going to do this underwritting. How long have they had to look at the books and do due dilegence?? and the synic in me says ......... (sorry cant write it)
The company needs $2 - 2.5M of working capital, when the gold price is near a record high, something is truely a miss here. PC in my opinion cannot be functioning correctly for those large amounts of working capital to be required. The company is burning cash like confettie, when will it end?
What was it ANX said just those few short months ago, NIS shareholders accepting this offer will get access to PC cash flow straight way instead of having to wait 18 months by staying with NIS.
Which company is cash rich now then?
Its possible NIS shareholders will vote this deal down now, after all, all they are seeing in front of them is a sinking shareprice, which values the offer at about 6 cents, exactly where the NIS shareprice was before any offer came in. Only now they will be required to stump up more cash straight away or see there effective holding in PC massively diluted.
There are obviously lots of things going on that shareholders are not being informed of, as to why the company is in such a mess. ANX directors and management have lots to answer for.
Sorry for being so negative.
LOTM