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Monkeydluffy, the only dilution mentioned, that would be relatively immaterial and unconcerning relates to the outstanding warrants. The choice to exercise them is with the warrant holders not the company. I agree with you that I think the probability of the company choosing to issue more shares themselves is low. I’ll go and buy my t-shirt now.
Nominee for Best disclaimer;
"Order your Rambler for life t shirt and mug at the Rambler website. We take no responsibility for any excitement generated during this announcement. Please remember to DYOR and any and all opinions expressed by anyone except yourself are completely biased."
Thanks. Based on the warrants issued and exercised since the share restructuring announced on Nov 13th last year by my calculations the unexercised warrants stand at 1.1 billion. I can’t imagine any warrants issued prior to the restructuring would still be exercisable either due to time limits or because of a likely much higher exercisable price. Therefore, the numbers and points I raised before all stand. I.e. when all the warrants are exercised they could result in net dilution of between 5 and 10% but for medium and long term holders that dilution should be set against a targeted increase in value of the company of 100 to 300% (a Mcap of £100M to £200M). If the copper price rises as predicted by many sector experts and the targeted production rate increase is achieved, even a Mcap of £200M could look very low in a few years’ time (see Cornish’s excellent calculations, from Friday I think). The potential upside is huge based on the equity and funding in place (there could be more funding required for exploration but only because the upside there looks enormous too and I would hope that would be funded from free cash flow over the next couple of years). So now we just need a competent management and staff optimising the use of an updated, fully operational mine (I’m sure there are significant opportunities to improve the efficiency of operations and bring the cost of production down too)and in my opinion I believe we are getting close to having that now.
Hi Dubbs, thanks for the reply. If you look at the RNS 13 Nov 2020, all the info is there. It was part of the restructuring of debt. There also was additional warrants in a later RNS. It's all in the excellent video the 2 chaps did. I've looked through the RNS's but not many have been exercised. Unless I've missed something, there is definitely over a billion warrants at .2p
Ps. If the no. of outstanding warrants is 1bn (based on your assertion that the company would receive £2M and I guess the least they would be exercisable at would be 0.2p) then that would result in a share dilution of c. 9.3% for a cash receipt the equivalent of c.4% of the market cap. So logically, with a dilution greater than the value it would generate then, it would be better for us shareholders for the warrants to not be exercised. However, they will of course be exercised and I actually think the company is in such a strong position now to create very good added value from using that £2M that I would conclude that I don’t mind when they are exercised because I absolutely plan to be a long term holder. I think the company over the long term could use the £2M to generate more value than 9.3% of the Mcap (c. £4.6M) so I’d prefer them to be exercised sooner. Day traders may have a different view. However, as the company is so clearly undervalued, I also think the warrants, even at a billion, are not a concern. I think the company should be valued, by the end of this year, between £100M to £150M. At an average of £125M the SP would be 1.17p. If all warrants are exercised the SP would fall to 1.07p. I’d be very happy with either!!
Sam spade, how many warrants have not yet been exercised and where is that data made public?
Thanks in advance for any advice?
Hi all. I've only been in RMM since Feb.(holding 42.4 million and adding) It seems a different beast now. Some great posters on this BB. Would love to know what investor's opinions are on the warrants. Its the main thing that bothers me about RMM. Would it be better for us all if they were exercised sooner rather than later? Every RNS costs money so hopefully they get exercised in big chunks. 1 positive is its an extra £2 million+ in the bank. Would appreciate any feedback thanks!
Enjoy your weekend all...roll on Monday.