Sapan Ghai, CCO at Sovereign Metals, discusses their superior graphite test results. Watch the video here.
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Thanks MEM
What you have now outlined...re possible use of money...falls squarely within the caveat I mentioned...
If money can be used to create greater equity value..to gain a higher value for me than would otherwise be the case...I would view proposals on their merits
But the original proposition that was set out on here
was to increase the pool of shares available in the market by means of issuing new shares at way below full value...ie dilution
Having met PG ...
I am happy that his interests and mine are aligned and that he is unlikely to lose his way
I think that Christian Dennis is no mug either
Good luck with the jail break!
Shall we club together to spring you?
ATB
So allowing an approach along the lines of "you can buy this business from us for fair value or we can just operate it ourselves and keep all the profits" approach?
I can see that could then lead to higher distribution per share.
Hi GRH,
If an entity knew what PRD has to offer, over a fairly short time period (I am thinking 18 months from now) various bites of the cherry, they could see the value creation on offer.
Let us assume the SP is 15p, but the possible upside is 300p, my thinking is, should we wish to create better liquidity and strengthen our balance sheet, perhaps prior to any Sale discussions on an asset (better to deal from a strong position with millions in the bank, than down to your last $200k)
That entity would be very happy to buy a chunk of stock at a good premium, because that way they will not drive the price up too much trying to buy the stock in the open market. PRD would be massively strengthened prior to any sales talks. Having a ‘corner stone’ investor can be very good for a small Co, as long as our interests are fully aligned, hence a legal contract that they would be in for the rest of the journey.
Current SH would benefit once the deal was announced, yes there would be more shares in the market, so everyone would get a slightly smaller slice of the pie, unless the corner stone investor brought massive experience and made up for the dilution by helping us achieve a higher price than PG could.
I am just throwing an idea out there. Deals are sometimes struck, some good, some bad, depends on lots of factors, but if PG ends up in negotiations with Exxon - having a larger partner, on our team, in the background, might strengthen our position.
I am not saying I am right and you are wrong, I am offering a idea, worthy of discussion - maybe ?
I shall now shut up and look forward to my evening gruel in my isolation prison/hotel at Heathrow (6 days to go)
It is
MEM and GRH,
I regard you and your posts extremely highly.
We all want the same thing - the optimal PRD share price.
let's all relax and have a chilled weekend.
I should know, having put both my feet, not just in my mouth, but halfway down my throat earlier this week with an ill-considered posting.
It has been a great week for PRD.
We are some may from Pol Roger champagne stuff but a decent Chablis may be in order.
The choir and its various insights is a great asset to this company.
Please not let the choir fall out with out each each, though we may not agree on absolutely everything.
For me, it will not be Chablis, but a decent Chenin Blanc will cap a great week for PRD.
As for my US holdings, I am still very positive but after this week of blood in the streets, it probably needs a double bourbon (and I can't even stand the smell of the bloody stuff).
I don't see the need for any flack, I just don't understand the proposition. As GRH says, any premium over the current share price would still be issued at a significant reduction to the true value and so would represent dilution. I don't understand why it is suggested that we need more liquidity to help the share price rise without an intention to sell before the final prize. If we are all holding tight, what do we get from higher prices and more liquidity other than feeling a little more secure with possible profits on paper able to be put in hand.
Afternoon MEM
I am more than slightly agog...
Would you please explain the process and math by which it could become value accretive...
OTHER than in the circumstances I set out in my earlier post
Unless an issue of shares was conducted AT or above my target price (very unlikely...why would they!) any issuance of new equity is dilutive to all current holders
(BTW ...the issuance of shares at a decent premium in a placing is very uncommon)
I spent most of my life in corporate finance...
formed and floated my own investment bank
so like to think I sort of understand the principles involved
this board now feels as if I have entered some form of parallel universe
Thanks
ATB
There is the simple proposition that should a entity wish to buy a large No of shares in PRD, PG can offer a Private Placing at a PREMIUM to the current price.
As we get close to news, I agree with Sefton, the HF etc want max profit in minimum time, that is fine, BUT PG needs a written agreement that any HF is in for the journey, not just the first bit of profit.
PRD is like a getting a puppy, its not just for Xmas.
So yes, more shares, full transparency, demand a Premium, and a legal agreement not to cut and run on their first 70% profit spike.
I cannot recall the Co Articles of Association, probably a EGM to approve the new shares.
This would become Value accretive, and reward LTH like GRH and quite a few other folk.
I think we do require more liquidity, this might be one option.
Tin hat on ready for the Flack :)