RE: Placing14 Aug 2025 19:47
With permission. Full reply.
Thanks for your email. I’ve seen some of the chatter, and I
understand the concern. Many of the 4p and 4.5p warrants are
long-dated - expiring in April 2027 and November 2027. Holders
typically won’t consider exercising until they are well in the money
and closer to expiry, although some may exercise along the way. If
that happens gradually over the next 2½ years, I don’t see that as
a negative - and as is often the case, some warrants will never be
exercised at all.
We have a small tranche of 8p warrants expiring at the end of October
(about 2½ months away). If they’re not in the money by then,
they’ll simply lapse. Another batch of 8p warrants expire mid-2026,
and it would be great to see the share price at a level to bring those
in post-DFS.
The holders of the most recent warrants are very supportive. They are
long-term investors (e.g. RAB) who are unlikely to sell quickly and
have indicated they’d be willing to exercise to provide cash for the
Company when needed - for example, post-DFS.
I think there are two separate issues here:
*
PERCEPTION - I agree that issuing warrants alongside placing stock can
sometimes create an overhang in investors’ minds, and we have all
seen an element of that in a past placing. In this case, however, we
don’t believe this tranche will have that effect.
*
VOLUME OF WARRANTS OUTSTANDING - as noted above, most are long-dated
and far from expiry. The share price would need to be materially
higher for these to be exercised, so we don’t expect them to create
real selling pressure at current levels.
As time goes on, we can also look at mechanisms to manage warrant
exercises more actively - for example, by placing exercised stock into
the market in an orderly way. I’m in process for suggesting options
for this now.
I acknowledge that the recent capital activity may have slowed
momentum, but we expect this to be temporary. As I’m sure you are
aware we have lined up a strong newsflow pipeline - assays, a
potential material JORC upgrade, further offtake developments, and the
DFS - which should help refocus attention on the progress being made.
Best regards,
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