With thanks to Bod100 on the forum
Dusto you are absolutely correct. The convertible security must first be converted into shares . The conversion price is clearly stated as either a)5 daily volume weighted average price during a specified period before the conversion date or b) they can have £800k worth at 5.78p AND they can’t convert within the first 30 days. They DO NOT CONVERT AT OUR NOMINAL VALUE OF 1p.
We ALSO need to approve at AGM an increase in head room to allow conversion of some of tranche 1 and all of tranche 2 BUT Bergen will fund the entire £2m of tranche 1 without waiting , an act of huge good faith in my opinion BUT imagine they have driven our share price into the rubble?
By 30 September one of our partners is on a timeline to get something away.
If they do the share price will rise
Why was b) stipulated. It is not normal
It gives Bergen £800k at 5.78p
If Bergen not interested or thought this totally irrelevant why is it there?
We are not in a death spiral funding aka UKOG was for example
We have definite prospects for seeing a significant share price rise within the 30 day minimum period that Bergen must wait BEFORE ANY CONVERSION can occur WOULD YOU SHORT under these circumstances/laid down conditions? It is also banned in the agreement but I appreciate some would argue that rule can be circumvented BUT for any shorting to win you HAVE to be able to buy the stock you have sold without owning at a cheaper price than you have sold and Bergen can’t convert for 30 days ,to me this is another very clever and protective condition in my opinion
Then in a year Bergen have the right to the 2nd tranche of convertible security AND to get this our market cap MUST be double where we now are (the 3.5% rule)
I think this is VERY clever on Mike’s part
We won’t need the money then, if no deals by then we all lost. I think this is there as a huge carrot ?? to ensure WE ALL PLAY FAIR
IMHO this is a CRACKING DEAL
And you don't think Bergen did their due diligence? You don't think QFI had to show them why they're such a good risk despite years of losses?
This is about as positive as you can get without a signed contract, which I'm sure Bergen knows are coming
"Do I detect a small tinge of hatred in your comments toward me ? : )"
Not at all 3rd, I don't hate anyone and I have plenty of friends, maybe some enemies as well. But if you're complaining let's recap some of the insults you've hurled out recently. Glass houses and stones comes to mind:-
" you take on the stance yet again if a bigoted politician"
"you are very good at avoiding the truth:"
"Sorr, but complete impatient stupidity."
" I'm bantering with a stroppy school kid"
"you are either blind to it, or simply are the the ultimate bigot."
"Only an idiot would vote for yes to that resolution"
"You are the ultimate bigot."
But how does it achieve it's true value (Mcap via SP) if this fickle market wants to see clear proof of the profits (dividends). The statement regarding the priority of allocating capital is quite clear. Return cash to shareholders after achieving 10,000mtv
My concern here is that Fortune may have his sights set on more acquisitions that continue to demand the full amount of cash generated, and as such it will be a very long wait for dividends. Sure, we'll all have shares in a behemoth, but will the SP reflect that? Because it certainly isn't at the moment
Thanks again BBN
However, you say "To achieve it the company need only complete on a good percentage of the plans it has in play. It doesn't need to be operating at 8,400 mtV but it would certainly help enhance their offering." But the company have said they won't pay dividends until they reach 10,000 mtv. (see below extracted from the full year accounts) Not picking an argument here, you're much better clued up on the business than I ever will be, but 10,000mtv could be a long wait
To reflect Bushveld Minerals' maturity into a producing Company, the Board is aligned with a consistent and disciplined approach to capital allocation to manage the funding of several capital expenditure items in the near and medium-term. In order of priority, the Group's capital will be allocated to:
· Maintaining existing operations and ensuring maintenance of stable and efficient production across all our operations;
· Supporting a strong balance sheet that is resilient through the vanadium price cycle;
· Investing in the Group's growth projects, either through organic growth or brownfield acquisitions, to achieve 10,000 mtVp.a. production nameplate capacity and downstream integration in the medium term; and
· Return cash to shareholders.
"Do you agree fyoz?"
No, my original post currently has 28 rec's so sentiment sides with me at the moment. However, since we've had an excellent explanation from BBN of why it's not prudent to use cash right now I'm prepared to carry on waiting for a while longer yet. And I suspect many who rec'd the original post are as well
The thrust of the post though, to halt the SP slide, is still relevant in my opinion
For your considerate, well constructed and courteous post, rather than the soundbite replies telling me what I can't suggest etc. So far 26 readers have rec'd my post which means there is some discontent within the shareholder base regarding the current SP. However, I'm sure many of those will be reassured by your post (as I am), as to why BMN have to preserve cash right now