Member Info for HeidHoncho

Freddy, it wasn't Deep Blue or whatever they were called that held the majority of the warrants, it was those who took the share placement in January through ETX that held the majority.

I am beginning to think that I may have misinterpreted the consolidation of warrants issue.

If that is the case then I apologise unreservedly.

Now if only I could find an error in my share capital issue then I will become a happier camper .... lmao

borgie, from the RNS of the 6th January.

"Following the grant, in aggregate, of the 220,000,000 warrants over ordinary shares, the Company will have 290,076,425 warrants over ordinary shares in issue."

I have only gone back as far as 2017 so far in my extrapolation of placing/warrant/option data, but so far the figure of circa 290,000,000 would appear correct.

nomlungu, in relation to your post I would welcome clarity of your understanding.

In relation to the Companies Act, is your understanding that both the number of existing warrants prior to consolidation get reduced at the same rate as the consolidation, whilst at the same time the exercise price of the existing warrants get increased at the same rate as the consolidation ?

In the case of the existing 200,000,000 warrants with an exercise price of 0.1p, post consolidation would have become 1,600,000 warrants with an exercise price of 12.5p

Thank you.

borgie, in relation to the number of warrants outstanding prior to the consolidation, it was in excess of 290 million, but at varying exercise prices.

With regards to options, I have yet to review them, but I know there was certainly in excess of 20,000,000, but likely in excess of 30,000,000 million, at varying option prices, in existence prior to the consolidation.

For clarity, my understanding is as follows.

Yes, as I have stated, the number of warrants/options are reduced in line with the consolidation.

However, I believe that the price that they can be exercised is not increased in line with the dilution.

Hence when I said that there were 1,760,000 warrants that could be exercised at 0.1p was based on the 220,000,000 warrants at 0.1p announced in association with the placement in January.

I hope that this clarifies my understanding.

borgie, both warrants and options get reduced in number pro rata to the consolidation.

What however does not alter is the exercise price of the warrants/options, and more critically so, neither does any existing share capital authority remaining post a consolidation.

The realisation of the remaining share capital overhead issue was the thing that most grinds my gears, and the timing of so many warrants being issued at such a pitiful exercise price just prior to the consolidation being announced sticks in my craw a little as well.

As always, my posts are purely a representation of my thoughts/opinion, but generally speaking based on substantive facts.

au contraire Freddy, my views on the consolidation are not as positive as yours.

It would be interesting to know who took the placement in January, as they certainly landed on their feet, how fortunate were they ?

For £200,000 they have potentially profited by circa £264,000 (had they exercised their warrants and traded them in at circa mid rise), and they potentially still held 1,600,000 shares, which they also had the potential to cash in at mid rise as well.

How fortunate were they, that within such a short space of time being able to more than double their "investment" !!

Not only that, the $11.50 costs I would assume that the poster is talking about the costs at the asset level, but only once a raft of other cost cutting procedures having been implemented.

But yes, you are correct, that cost figure does not account for any overheads, or financing costs (were the Company able to obtain financing to cover Capex, and not fund raise by means of issuing share capital every time).

the intricacies associated with the recent placings, and the uneven effects associated with consolidations, one of the next RNS's that I would anticipate seeing is for the conversion of warrants.

Now I'm not talking about the warrants that will be associated with the upcoming placing, but from previous placings prior to consolidation.

There are circa 1,760,000 warrants with an exercise price of 0.1p, circa 215,385 at 0.13p, circa 60,000 at 0.2p, circa 136,000 at 0.4p, circa 53,333 at 0.75p, and a yet to be calculated number at varying exercise prices at circa 2.5p-4.0p.

The exercise of those warrants will bring a veritable pittance of money to the company, but the holders of the warrants would have made a very large profit.

Take the 1,760,000 warrants for instance, had they been exercised and sold into the rise, then VAL would have received £1,760, but the holder of those warrants would have made, and let us utilise a mid rise price of say 15p, a total of £264,0000.

A tidy profit given that those warrants were only issued this year.

A lesson learned, be very wary about ALL terms associated with a conversion, and equally so about being readily convinced to give away shareholder rights of pre-emption.

I suppose it would be beneficial to take what little positives out of that which you can.

Had for example, that Company had £50,000 of share capital left in their authority to issue 0.1p nominal shares against, which prior to consolidation meant that they could only issue 50,000,000 shares, would still have been a mere trifle had the equivalent 1,450,000,000 shares been in issue at that time.

However, with a post consolidation figure of only 12,000,000 shares been then in existence, the Company would then still be able to issue 50,000,000 post consolidation shares (an increase of in excess of 300%) within their existing overhead, without recourse to obtain further authority from their shareholders to do so.

And were you so inclined to do so, consider the devastation ensuing had that Company still had only £100,000+ of their initial share capital authority of £750,000 left available.

I don't know about you, but I was gobsmacked when I realised what was permissible under the Companies Act.

Can you imagine if that company had not utilised any of their previously authority to raise £750,000 of share capital, as post the 125 to 1 consolidation there would have been 6,000,000 shares in issue, yet the Company would still have the entitlement to raise a further 750,000,000 post consolidation shares (an increase of 12,600%).

Without having recourse to secure any further authority from their shareholders to do so.

TTFN, till tomorrow, or perhaps later/earlier.

In laymen's terms, or rather, as best as I can, I will attempt to breakdown the issue as I saw it, and the background as I believe that it was explained to me, as to why such an issue could be misconstrued initially.

I will utilise arbritrary round figures, but those figures will be reflective of the sort of values associated with the matter in hand.

I may merely have been naive, and I am the only one that was aghast and astonished with the facts as they were explained to me, but if only one other out there who were not aware of what might occur to any of the shares that they hold in any company that performs a consolidation of it's existing shares in issue, then my time and effort will have been worthwhile.

Let us assume for a moment that a company has for the sake of argument a current share capital of £750,000 at a nominal value of 0.1p, culminating in them having 750,000,000 shares in issue.

Then at a GM they receive the authority to increase that by 100%, resulting in them now having overhead to raise an additional sum of capital by £750,000 at a nominal value of 0.1p, then they would have the authority to issue a further 750,000,000 shares within that period.

Throughout that period let us assume that £745,000 of share capital at a nominal share value of 0.1p was issued, culminating in 745,000,000 shares being issued.

This would still have been within the authority they were given to raise capital, resulting in them having only an "apparent" paltry figure of £5,000, equivalent to only 5,000,000 shares left for them to issue under that previous authority.
And let us be honest, with 1,495,000,000 shares already being in issue, the authority at that time to issue a further 5,000,000 shares doesn't amount to a hill of beans.

The Company then consolidates it's shares at a ratio of 1 new share for every 125 shares previously held.

One would logically then assume that all associated previous values would then also be diluted at a ratio of 125 to 1, but apparently not.

One would perhaps assume that either the available headroom remaining, be that in share capital left available under a previous authority, or alternately the number of shares still left available at that point in time, would also be subject to the 125 to 1 consolidation rate.

But, oh no, the available share capital headroom remains at £5,0000, but with the share now having been consolidated at a ratio of 125 to 1, but the previous nominal share value remaining at 0.1p, this means that post consolidation there still remains 5,000,000 shares that can be issued within the existing authorisation.

Consequently, that is how that particular Company would be permitted to generate, in this instance, an additional 5,000,000 post consolidation shares, without requiring any further authority to do so.

I hope that the above was expressed in terms that could be understood.

I am now off for a lie down in a darkened room, and unlikely to be posting further to

In continuation of my posts of yesterday, and having now sought clarity on the issue through discussions with the Company, I feel it incumbent on me to update you on my understanding of the issue as far as I am currently aware.

I would not ask that anyone take this as gospel, as I may have misinterpreted the background that was explained to me, and I would not deter anyone from corroborating the understanding through channels of their own.

I have yet to complete my forensic review of the authorities granted, and shares/warrants/options issued, going back as far as 2017, to assure myself that everything tallies up, as that will take a number of days to complete given the large number of data points that I will require to extrapolate over the past 36 months or so.

What I have identified, to my astonishment, is not a loophole particular to Valirx, it is something common to all shares, therefore my input is not in this instance targeted towards Valirx in any way, it is an issue that may come into play across any of the shares traded that are governed by the Companies Act.

I made a voluntary commitment to ensure that any angst I now have with regards to what has occurred would not be me singularly pointing the finger at Valirx, it is however an indictment of what could potentially occur with any shareholding that you may hold, and for this "heads up" to be something to be cognisant of in any share that you may hold that has a consolidation.

My understanding of what occurred, and I had difficulty initially accepting had been permitted to occur, will I hope be explained in laymen's terms in my following post (bear with me for 30 minutes or so with regards to how swiftly I can complete it, I am a one fingered typist, and brevity is not my strong suit).

Although I may now better understand what I initially thought was actions outwith the Companies Act, it has never the less not been any less astonishing to me, nor has it sweetened the bitter pill any for me.

has anyone been able to make direct telephonic contact with the Company today ?

There is no credibility in that excuse.

Clive has technical expertise available to call upon to review any of the technical/operational data that he is looking to release in an RNS, so the fact that he states “well I’m not technical” in relation to incorrect information being released in an RNS holds no water.

Additionally, any intimation that “we can always stop giving the level of information that we do” likewise holds no water and is merely bluster.
As is commonly known, any information that has come to be known, that has the potential to have a material impact on the SP, must be released to the public by means of an RNS at the earliest opportunity.

IMHO

In which RNS was that detailed, as I must have missed it.

Unless the “broken pipe” that you are mentioning was the piece of drilling BHA that was left in the well during the drilling phase.

If so, then that is a completely different, and wholly unconnected, issue to that which they have alluded to today for the first time.

IMHO

When was it previously announced that the tubing in the A5 well had failed, and the well now required an unscheduled work over to replace the tubing ?

I would have anticipated that this would have been deemed to be an issue with the potential to impact the SP, and as such should have been RNS’d.

Perhaps I maybe just missed that notification being included in an earlier RNS.

Thought MTR had a 19.99% interest in Cobre (different company).

I wasn’t aware that they had an interest in Cobra as well.

Too coincidental.

All,
I am appreciative of the interest you have shown in my posts, but I have little/no time available to me this evening to respond to them (I have a dog to walk, and a partner that requires social interaction).

I would however leave you with a response to the question received from the poster DaveKelly earlier, as it perhaps leads to another significant issue that may have been identified, that I didn't have the time earlier to include in my previous post.

As always I attempt to substantiate the origin of any facts that I have unearthed that I make my deliberations on, and the following point is in reference to the RNS dated the 1st April 2020 (the date of which I hope doesn't end up being ironic), this RNS relating to the result of the votes cast in relation to the resolutions appertaining to the General Meeting.

It states, and I quote, " The Company announced on 25 March 2020 that 7 days' notice of the reconvening of the meeting would be required but given both the urgency of the financial situation and the fact that shareholders would not be able to attend and vote at any reconvened meeting because of the COVID-19 lockdown, the Board has decided to allow the proceedings to be decided on a poll based upon the proxies received for the General Meeting at its originally scheduled time.".

The result of the poll, in relation to resolution 3, regarding the proposal for disapplication of pre-emptive rights, was 158,156,997 in favour of the resolution, and 60,821,243 against the resolution.

Being that resolution 3 was a Special Resolution, which requires 75% of the votes cast to be for the resolution for it to be passed, the number of votes cast in favour was less than that required, and as such the resolution was not passed.

Furthermore, under clause 561 of the Companies Act ( http://www.legislation.gov.uk/ukpga/2006/46/part/17/chapter/3/crossheading/existing-shareholders-right-of-preemption ), the following relate to the requirement to shareholder's pre-emptive rights (bearing in mind the company were unable to secure disapplication against them).
561
Existing shareholders' right of pre-emption
(1)A company must not allot equity securities to a person on any terms unless—
(a)it has made an offer to each person who holds ordinary shares in the company to allot to him on the same or more favourable terms a proportion of those securities that is as nearly as practicable equal to the proportion in nominal value held by him of the ordinary share capital of the company, and
(b)the period during which any such offer may be accepted has expired or the company has received notice of the acceptance or refusal of every offer so made.

Now I may be wrong, but as a shareholder I cannot remember the above noted in (a) having occurred, so if that is correct then logically the above noted in (1) must surely come into play.

If the above is an accurate representation, then how were the Company able to issue circa 5,714,288 sh

Given that this notice was made prior to any additional authority to allocate share capital having been secured, I find the utilisation of the statement “The Placing Shares would be issued under existing shareholder authorities and not dependent upon resolution 2 or resolution 3 of the Capital Reorganisation General Meeting being passed.”, given that we had previously identified that not only was there no existing shareholder authority being available, there was apparently already in existence 29,568,420 shares more than the Company had the authority to issue.

I am not stating that my interpretation of the facts presented by the Company an accurate representation, but it is certainly my humble uneducated understanding/opinion of the same.

I truly would appreciate being corrected on any misapprehensions that I may have made in error, and would welcome others viewpoints on the same.

Neither am I asking that anyone accept what I have postulated as being fact, but where possible I have detailed the sources that I utilised in the above, and would respectfully suggest that anyone interested in conducting their own review on the subject to perform their own research.