Member Info for Metalhead25

I haven't looked into this specific point but generally speaking I believe there is no "conflict of interest" rule applicable to shareholders who are not directors. Shareholders are expected to act in their own interests. Whether interested shareholders can vote on a rights issue would, I imagine, depend on the provisions of the Articles, the Companies Act and the listing rules, which I haven't looked up

I can definitely see that in the duster scenario it might be renegotiated. But in JP's big success scenario, where shareholders then block the share issue, I can't see how that can be frustrated by renegotiation.

FK, I didn't mean that you wouldn't or couldn't get to 10%, only that even that is no mean feat and you'd never get to 50%.

Not sure I follow that point, Ella.

JP, re poison pill, I can't think what form such a thing would take, given that presumably what you're suggesting is that it might be imposed by the contract. I also can't see how it could be proper to include a poison pill in the contract. Since I haven't seen the contract, I obviously can't comment definitively.

Aaargh, posted too early, sorry. Should have said:

JP, based on my understanding, the answers are:

1. Yes, in the big success scenario the shareholders can veto stage 2 (and indeed stage 1). This is possible because the shareholders are not bound by the contract.

2. No, as a matter of law, in the duster scenario Purebond cannot walk away, because they are bound by the contract subject only to the conditions being fulfilled. Query, though, what would happen in practice if they simply refused to complete. Would it be realistic to sue them? I don't know.

JP, based on my understanding, the answers are:

1. Yes, in the big success scenario the shareholders can veto stage 2 (and indeed stage 1). This is possibly because the shareholders are not bound by the contract.

2. No, as a matter of law, in the duster scenario Purebond cannot walk away, because they are bound by the contract subject only to the conditions being fulfilled.

2.

Some curious takes on here this morning. The main thing we learned today was that the investor will have control over the company (enough to pass an ordinary resolution, although not enough to pass a special resolution, which would be of greater concern). We also learned that the investor specifically wants control, hence the provisions allowing it to maintain its percentage interest by further investment in the event of a placing or warrant exercise. What follows from this?

1. The idea that in the absence of a lock-up the investor will be drip-feeding shares into the market and suppressing the price is, with all due respect, absolutely crackers. The investor is not going to sell its shareholding down below 50%. Also, selling that amount of shares in the market is not realistic.

2. On the basis of the RNS, it would appear that FKC is wrong to say that the investor is free to pull out of stage 2. As I read it, both stages are binding subject to the conditions which are stated, all of which relate to things that people other than the investor may do (regulatory and shareholder approvals, essentially). There is no suggestion that there is a general discretion to pull out.

3. I would suggest that existing shareholders need to consider how they feel about investing in a company over which one shareholder has (ordinary resolution) control. You may think "now us small shareholders will have no control". Or, you may think we never had any control anyway, and that the real practical effect of this transaction is to shift control from Ben Turney to Purebond. I am of the latter view. In fact, I believe the balance of power will significantly improve. At the moment, whatever Ben wants happens. In the future, whatever Purebond and Ben together want will happen - a bit more of a check and balance.

4. Ben Turney is now sackable. As I have made clear, I quite like him. However, a lot of you have complained about him ad nauseum. Realistically, as FKC has recently illustrated by demonstrating to us the difficulty of cobbling together even 10% of the shares in issue, the shareholders would never have been able to remove him. Purebond absolutely will be able to (if they want to).

I am still unconvinced by this deal in terms of amount, timing, dilution etc. However, I cannot for the life of me understand how the haters of the current management can be against it. It will greatly temper the power and job security of the current board whom you hate so much.

Honestly I think you need to decide what you are trying to achieve. If you want to block the proposed private placing, you don’t need to do any requisitioning of meetings or proposing of motions; you just need enough people to vote against the motion that the board will propose. If you want explanations of things (most of FK’s agenda items are couched in this way), I would suggest you start by just asking. Ben always replies to me on Twitter DM. It seems to me that the only action that really requires the requisitioning of a general meeting or the proposing of a new motion at a meeting would be an attempt to get rid of BT and/or the whole board. If such a step were to be proposed, I as a shareholder would want to know who was lined up to replace him/them.

Nah

Stan, you can’t vote against it because you’re not a shareholder. You’re a guy on a chat board who only posts to push the share price down

FK, the board will have to call a general meeting anyway, for approvals

Hi overtrader. Tbh I’m not sure who I’m referring to either! I’m not having a go at anyone. I’m just saying that the conversation this morning exactly mirrors the one that happened on this BB when the previous raise was announced early in the 082 campaign

I am not convinced by the timing or size of this deal. However, I think it is right to point out that almost everyone who is now saying “why don’t we drill first and then raise at a higher price” said the exact same thing at the time of the last raise, when this board was very widely of the view that we should complete the 082 campaign first and then raise at a higher level. In hindsight, this BB’s favoured approach would have been much worse and resulted in greater dilution at a lower price.

Now, it doesn’t necessarily follow that we should raise rather than gamble again this time. As I say, I’m not convinced. However, I do think a bit of humility is called for. In the game of “raise or gamble”, this BB is currently 1-0 down

Zimbabwe is fine and it is nice that somebody wants to back the company. The questions for me are simply around amount, timing and price of dilution. I would prefer a smaller amount at this point

I’ve taken some profit at 3.13. It does look to me like a raise is needed in the very short term. That, combined with the inherent possibility that the latest rise goes the same way as the previous two, makes me think there may be cheaper entries ahead. No reflection of the company of which I’m a great fan; just sector dynamics

Ben said in recent interview that acquisitions are likely to be around end of April, so certainly early next week seems likely. I’m not sure about the SP being relevant to that but maybe there’s some reason why the accounts needed to be published

I don’t think it’s suggestive of a placing on the market, it’s suggestive of a private investor which they are currently working on, hence also the timing (Q2) which is much earlier than is actually needed

Good point, overtrader. Also, it clearly is not the case that POW have proved that you can’t hunt for massive sulphides using EM signatures. You absolutely can, and many deposits have been found in that way. In fact, it’s the industry standard geophysical method as far as I’m aware. As I said, it’s very hard to assess what went wrong for POW without knowing what their data was. It may be (for example) that what their campaign shows is that a conductance reading in the low thousands can be explained by salt water or graphite or certain non-sulphide rocks. But we already know that!

One thing I would say is that Ben will know what the conductance readings on Molopo were, from Kav’s due diligence on the failed Molopo transaction. So we are very well placed to learn any lessons from Molopo, even though that process is not visible to us shareholders

My thoughts are that POW never published conductance readings for Molopo, so that it is impossible for us to compare. If their conductance readings were in the 10ks of Siemens I would be worried about read across to our B1. If theirs were significantly lower, it would seem pretty irrelevant

When Rod turned up around the same time as the AA deal there was a lot of chat on this board that the two things were linked - seem to recall Max had a very strong belief that Rod had opened the door to AA even before he was appointed. Well, a very notable feature of the operational RNS today is that it makes no mention of AA at all - on the contrary, it talks about future negotiations for offtake. So… is the AA deal off? And is that why Rod is outta here? Just an idea, obviously - no hard basis