Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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What sort of time frame could we expect to see the next update on the progress of the drilling from the more experienced investors
Sharetime, first of all placing shares are rarely issued at a discount of more than 15-20 % to the prevailing market price of the stock, and warrants are normally priced at around double the price of the placing stock to encourage long term holding. There are good placings e.g to fund an acquisition or to install plant for production, and bad placings which just help to pay salaries, and the market will respond accordingly with the share price often falling below the placing price for a 'keep the lights on' placing. Trading does not cease and in the event of what is perceived to be a 'good' placing investors will often see this as an opportunity to hoover up cheap stock provided of course that more news of progress is anticipated in the near future.
With warrants holders will often sell, as has been the case here, in order to bank an easy profit where the sp exceeds the exercise price and that explains the downward pressure on the share price, but the last date for exercise of the warrants issued in the 2019 placing is November 1st and I suspect that we will see few if any further exercises prior to that date owing to the complexities and timescales involved in exercising them . For your info when I have exercised warrants in the past with other companies the process has taken a minimum of one week and in one case more than two months.
Colin Bird has clearly exercised his warrants on a 'use it or lose it' basis and intends to hold for the longer term, so I see that recent RNS as a positive and perhaps a message to any holders of outstanding warrants, so in the unlikely event of further exercises prior to the cut off date I would expect the holders to retain the stock for the news which is to come. I hope this helps.
CB is now hugely incentivised to increase the value of GLR and has had cash through the door from Sandfire, warrant exercises, and more to come from Star Zinc. I therefore suspect that with the metallurgial testwork completed at Glenover he will be looking to set up a plant to process the phosphates, given the massive recent price rise in that commodity. Not sure if the same plant could process rare earths but becoming cash generative should attract a lot of new investment here. imo, so I am adding whilst the sp remains in bargain basement territory.
I think if CB had been able to extend the exercise of the warrants it would have come across a bit negative. However, this is positive. CB seems to be only buying more or have large stakes in GLR and XTR - remember he took around 26 million shares out of JLP at the beginning of the year at 13p. He has always had a big steak in GLR and he could have sold out a long time ago but I suspect he's always seen value in the rare metals mine among the others we have.
Thanks Piscator1 - I've a bit more reading to do - the articles of association.
Well there are some exceptions under the model code which might allow this to happen Ella, in particular this bit:
“ Exercise of options
14. The chairman or other designated director may allow the exercise of an option or right under an employees’ share scheme, or the conversion of a convertible security, where the final date for the exercise of such option or right, or conversion of such security, falls during any prohibited period and the director could not reasonably have been expected to exercise it at an earlier time when he was free to deal (see also paragraph 20(h)).
15. Where an exercise or conversion is permitted pursuant to paragraph 14 or 20(h) of this code, the chairman or other designated director may not, however, give clearance for the sale of securities acquired pursuant to such exercise or conversion.
Qualification shares
16. The chairman or designated director may allow a director to acquire qualification shares without regard to the provisions of this code where, under the company’s Articles of Association, the final date for acquiring such shares falls during a prohibited period and the director could not reasonably have been expected to acquire those shares at another time.”
I am assuming that warrants would be regarded as convertible securities or rights under this section.
Hi Piscator1,
I'm not suggesting the exercise of warrants is negative. However, as CB has been able to exercise warrants he is not in a closed period so isn't in posession of any material news that needs released to the market prior to him dealing. It is that aspect the surprises me - due to the imminent expiry of the warrants I had expected an extension on his portion.
Whatever way you look at it it is a Director buy, and unlike the other warrant holders there will have to be a RNS should CB sell any stock. It should therefore be taken as a positive. These warrant exercises will have brought a lot of extra cash into the company and the latest makes me wonder if CB is planning another acquisition or preparing to get Glenover up and running.
I'm surprised CB was able to exercise warrants.