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Deep - I think the CPR just reflects the extended well test result on which the discovery was based last year. The company has provided them with those results, all the sub surface modelling assumptions and the project development plan (all from the feasibility study). The discovery RNS made clear that the well projections relied on the company's internal modelling of a best case scenario for flow rates using artificial lift. It's a hypothetical model. The CP has to offer an independent opinion on whether that's proven or contingent, which they've done in detail, setting out the main contingencies. Maybe the company were hoping the CPR might offer them slightly more benefit of doubt.

Conversion must have been notified between close of trading 26 and close of trading on 27 August for the numbers to match up to the conversion formula (based on 26 Aug being last day of ten day period).

Yes, 17 September 2024 was the end of the already extended exploration licence period. They had to go for mining or relinquish the licence, which they did with the other expiring licence areas.

Deep / Dai - I think you need to start from the CPR, which fell short of validating the company's best case scenario, giving the more conservative model a higher probability instead, and highlighting the complex contingencies involved in establishing its commerciality. This wasn't surprising as they couldn't do more work before applying for the mining licence at the September deadline, and they always said the project was only just entering the appraisal phase. They need to prove that the actual flow rates can support their best case scenario planning for a 'typical well' at Itumbula, and they'll need to strengthen the wider field/reservoir modelling to address the CPR reservations about gas water ratio stability and depletion. As the CEO said clearly in the last interview, they need to push those numbers up the scale towards proven reserves before they can advance their discussions with potential investors. At the moment the independent CPR says commercial success is contingent on the company's best case modelling scenario proving both correct and sustainable. That requires work but if they can evidence it then there's a clear basis for more stable investment.

That would be pointless. The company would be unable to continue without the capital

Yes, it probably would and that will likely be an important consideration during the distribution phase for converted shares among the equity funds, the brokers/MMs and the retail market. it looks as though they will churn as much as they can as quickly as they can, irrespective of price, but there may be a tipping point of reduced demand where they'll benefit more from selling or reselling into news spikes. That would be fairly typical for this kind of CLN process. The broker in particular needs to weigh up the number of shares they recycle into the market versus the number they hold in inventory pending potential news, or simply to lend back to the debt funds for forward selling future tranches. Their job is to maintain an orderly market one way or the other anyway.

The main purpose of the constrained retail offer would be to drive liquidity demand (while sweetening the bitter pill RNS) so that the CLN holders could forward sell into their first tranche conversion with maximum profit, surely?

And too many new names encouraging people to top up on a falling price

'all over' which Reddit?

"No more CLN conversion until 0 64p now and news due about the Tanzania ML next week"

That would be surprising

At least PC is consistent. I’d be more interested in the daily posters who kept telling everyone to top up and average down into forward selling of CLNs, while actively abusing any contrary opinion, and now magically disappeared.

The debt funds that hold the CLNs will have fairly tight protocols for profit margin and turnaround in the short to medium term. The equity fund affiliates they work with will have more flexible strategies enabling them

to sell or hold AIM shares opportunistically. Marex will also be opportunistic in the extent they want to lend and reabsorb the shares as inventory, depending on market liquidity and potential company news. First priority is for the debt funds to get their money back with profit (or at least profit within their financial parent group). The shares will be borrowed from Marex and forward sold. They rely on the declining VWAP to call a conversion in time to return the borrowed shares at a discount. Second priority is for the equity funds and the broker to profit from any shares held speculatively rather than sold (e.g. on expected news spikes).

“ Have Marex and the Investors gagged the Board until the Notes have all been converted?”

Of course they have, or at least Liberum has

She’s still the company’s biggest survival asset pre revenue.

They’ve already sold them. The conversion is to cover the sells at discount.

That probably depends on news and share liquidity but likely 20% lower than that for the next tranche. On the plus side, they’ve done well to wash 600m shares already on ni news (although the number to launder increases with each price drop).

That happened yesterday, pre auction. It’ll reset on open.

That’s just how CLNs work in this context. Unfortunately ‘long term shareholders’ don’t add new cash to the business so any pre revenue company with high operational costs needs access to capital markets. AIM is well suited for that purpose. If the company ends up in commercial production with no debt then it’s a good outcome. Brutal all the same.

They would not have had a choice. They make third capital requirements and the broker builds a book based on what the capital partners are prepared to offer. If the Rukwa CPR had come in with proven reserves they might have had other options there. Galactica is more of a mystery perhaps.

That’s not what is happening. The ‘investors’ are debt funds focused on short to medium term profit from capital events. They will arrange with an equity fund and the broker to forward sell shares into the market and cover through conversion at a discount.