First Uranium Corporation T.FIU

to clarify

[idunnobut]

The fact that FIU can offer common shares worth 95% of the face value of the convertible debentures should be understood by FIU shareholders. This means that FIU does not need to go to the financial markets to raise $150M because it can pay back the debentures holders with common shares. This is very clearly stated in the 2007 Annual Report.

If FIU raises $150M before the debentures are due, then it will avoid the uncertainty of what happens when the debentures holders become owners of what could be (at $1 per share) 142.5M newly issued shares. Two alternatives come to mind: (1) the convertible debentures are exchanged for new convertible debentures (2) FIU raises $150M and pays back the debenture holders full value. Anybody who believes the debenture holders initially invested $150M which was convertible into 9.1M shares and are now holding debentures worth approximately $9M is simply wrong. The facts that are relevant are plainly written in the 2007 Annual Report.

Interestingly, when the debenture holders initially invested in FIU, the $16.42 price per share was reasonable at that time. If the outstanding shares was expected to be no more then the current outstanding number of shares (125M), that would have put the market cap of the company at $2B. Since that time, gold has doubled from $650/oz to over $1300. $2B seems cheap to me now.

[PUNJABI]

"First Uranium has the option, subject to regulatory approval, to satisfy its obligations to repay the principal amount of the Debentures upon redemption or at maturity, provided no event of default has occurred and is continuing at such time, upon not less than 40 days and not more than 60 days prior notice, by issuing and delivering that number of freely tradable common shares obtained by

[idunnobut]

Starting on page 75 marked as page 73 in the PDF. https://www.firsturanium.com/sjfu/action/media/downloadFile?media_fileid=123

[PUNJABI]

The annual report has limited information. What I have seen on the balance sheet is a run of the mill ordinary mandatory convertible debenture which will be eventually converted into shares at the conversion price fixed at the time the debentures were issued. It is common to have the redemption option that the company can exercise under certain conditions at its sole discretion. It is an

[stude]

PUNJABI , enjoy your post and analysis too , I think and hope YOU R RIGHT  , convertible debenture holders should feel some pain too like all of us here bagholders , they can't have both ways .