RE: More nice chunky buys this morning08 Jun 2022 09:13
Hi Trek,
The warrants just give the holder the right to convert to shares at a set price, in this case 2.5p.
If the SP stayed below the strike price then you wouldn't convert instead just buy more shares on the open market at a cheaper price and let the warrants expire.
My main point is that the converted warrants would raise funds for the company, £7.5m.
They need these funds to pay for the capital expenditure CAPEX. They are producing revenue through gold sales but it isn't going to cover the cost of the expansion and continue to drill at some point in the future they'll need extra funds
They did have a £5m CLN which they changed to a £2m strategic placement.
Maybe the £2m is enough but as long as the warrants are there before they expire, the risk of huge dilution isn't there for this year.
ATB