Capital raise.15 Nov 2020 20:06
Not much discussion on here about the forthcoming equity raise which I find surprising.
Some of my thoughts -
It is only partially underwritten on the SDR's and not at all in the UK. Either they couldn't find anyone or perhaps it would have been too expensive, as it is, costs of £1.3m is too steep from a £7.3m Ri, but probably reflects the risk involved. If this is fully subscribed in Sweden and virtually no take up over here, the o/a costs as I understand would be the similar.
Let's assume a full take up, we then have over 828 million issued shares.
Can't remember the last time BEM actually conducted any physical work at the Kallak site, even the drilling work at KS was cancelled.
If I hear some of the additional fund raise will be used for a scoping and pre feasibility study one more time…..and then they say, BEM's priority remains the exploitation concession. It seems to me that their priorities are financing Vardar.
The last refinance from Nordic investors raised £1.0m before (still unknown) expenses, after which we couldn't wait to make a further investment of £300k in Vardar. That ownership has increased from 42.2% to 46.1% this additional stake values Vardar Minerals at a theoretical value of c£7.7million.
Now all these additional funds we are injecting into Vardar are, apart from the increased ownership, instantly spent on Vardars's exploration programs. Vardar being a private limited company, we have no up to date info on their cash position.
I think it's safe to assume that BEM are providing all the finance in return for increasing expensive percentages, but without a majority stake we don't have overall control. The more capital we inject the more the percentage value increases, its like catch 22.
Vardars's last results were "micro entity accounts" which indicates a very small company with a turnover of £632,000 or less and £316,000 or less on its balance sheet. If it was CSP making these cash injection decisions I think more investors would be asking more questions only the initials have changed to KRB.
Many on here have given their views as to what the SP could be when this concession is awarded with 'guesstimates' differing wildly. While a 35% discount sounds generous at these prices it's only a couple of pence. Think about that, is it worth it?
This capital raise may suit some with a high average and may afford a chance to lower that, if they can exceed their quota, but with my average it's not worth it and I've not changed my mind.
Sorry for rambling on this Sunday night, the other half is watching strictly.
As I said previously, good luck if you participate, we all need it to come good in the end.
Full prospectus this week.
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