Sapan Gai, CCO at Sovereign Metals, discusses their superior graphite test results. Watch the video here.
In which case there would have to be an RNS informing they'd been exercised, that the cash had been received and that there were now 5m more shares in issue. The company can't release that RNS 'at their leisure'.
Yuri - Even if they'd exercised the lot and sold at 12p, that's only £100k profit for them and they'd have had to lay out the £500k to do it. Surely peanuts to Bergen? Do remember they've not paid anything out yet for their 'investment' in these warrants, so they can still make their usual profit margins by lending the £500k elsewhere. Anyway we'll soon know as each and every warrant exercised and the resulting revenue has to be RNS'd immediately.
Well again, I'm doubting that Bergen would have exercised any of those warrants yet - the attractiveness of the potential leveraging is just too high in my view. Bear in mind they've not paid out anything yet for those warrants. The cash they haven't paid is still sitting in their coffers ready to be lent to another outfit in need of cash. It's a bit different from having participated in a placement when you've paid out the cash and you want it back ASAP at a quick profit. If Bergen are to exercise those warrants they are going to have to pay ANGS a total of £497,500, whether they do it now or in nearly four years time. That expenditure/investment won't alter. So, if, as you're suggesting, they've already exercised them, and they were smart enough to have sold at 12p, then that's a 10% profit - not the usual stuff that Bergen dreams are made on! If on the other hand they've held on to their £500k and lent it elsewhere for a month .... If they exercise when rhe SP is 20p (not beyond the realms of possibility?) they've made 100% profit. I know what I'd do!
I seriously question whether some posters on here understand what warrants are! There have been at least two posters on here this morning stating unequivocally that Bergen are out 'warrants and all'. Truly the Bergen warrants are a total irrelevance at the current SP level. First of all, there is no 'open market' price for them right now, so anyone buying would have to do so on a direct transfer basis with Bergen. (In case you're wondering, there often is a quoted price for a warrant, particularly where they are acquired as part of an open rights issue package.) Now (sorry if this is teaching Grandma to suck eggs - but for the benefit of those who really don't know what they are about) consider what a warrant is. It's a piece of paper that entitles you to purchase a share at the fixed price stated direct from the Company, either now or at some time in the future. Usually the period of time within which you can purchase is designated - in this case four years - after which that entitlement lapses and the warrant is worthless. The shares you purchase when you exercise the warrant are 'new' shares and the money you pay (the exercise price) goes straight into the company Treasury. You're not obliged to exercise warrants you hold - you can just let them lapse voluntarily. OK now let's look at the 5m Bergen warrants. They entitle the holder to purchase ANGS shares at 9.95p. So how much would you pay right now for that 'privilege'. My guess is 11p at most. So Bergen have sold all 5m of their warrants and raised £50k? I think not. Now, please also bear in mind that Bergen haven't coughed up any cash for these warrants - they were bunce - part of their fee for the loan as it were. So the argument that the Bergen MO is always to get cash back and profit ASAP doesn't hold here. For me the whole point of buying/holding a warrant (and I have bought them more than once in the past) is that it is an excellent way of leveraging your position/exposure in a share that you are convinced is going to rise in the future. So - let's fast (or slow) forward and the ANGS SP is 21p. Now you might perhaps pay 10p to Bergen per warrant (assuming you wanted to exercise them immediately) and they receive £500k for their total holding. When the SP is at 30p or so they're looking at £1m. In actual fact warrants always trade at a discount to their theoretical value (SP minus warrant price) but you get the picture. That's why I'm saying that Bergen would be totally dumb to sell at the current SP - even if any investor was going to buy - so there's no way rhey are 'out - warrants and all'. The warrants aren't shares in issue and they're a total irrelevance at the moment. At some point, when the SP makes it worthwhile exercising them, they will represent a dilution of 5m shares, but until then not an issue.
Ja51 - Sorry but I can't help on that! It did strike me at the time as being uninformative. For a start it's only 'may be', not 'will be'. Then it's 'a further payment' - but the amount is unspecified. It almost sounds like a gentleman's agreement - but they ain't worth the paper they're not written on. Only the interested parties will know - and actually that ain't right!
Was it - fair enough! jA51 - Well there could be another tranche of cash incoming based on that RNS, but nowt of significance. Under section A of the RNS Bergen were 'gifted' 2,250,000 shares as, or in lieu of, a fee for the loan. Under section B they were issued 6,925,000 shares 'at par'. With Angs shares having a par value of .2p that means that Bergen effectively will have paid ANGS all of £13,850 for those shares - which are/were worth £692,500 at, say, an SP of 10p. Under section C, Bergen can 'require' ANGS to issue them a further 1,175,000 shares 'at par' - for which they would have to pay all of £2,350 ... Hardly a major income source?
Wasit - Sorry but that makes absolutely no sense at all! No-one is going to pay Bergen 9p for a paper warrant entitlement when they would then have to pay a further 9.95p to exercise that warrant and acquire the 'full' share. Get real! How many Angs shares would you rush to buy 'a few weeks ago' at 18.95p? Bergen have up to four years to exercise the rights inherent in those warrants. The warrants themselves will only become realistically tradeable when the market price of the share significantly exceeds the warrant exercise price. So, today, with let's say an SP of 13p, I might consider paying Bergen 3p a warrant thus meaning I could acquire a 'full' share at a small discount, but I wouldn't pay more than that. Usually warrant holders sit on them until they represent a really large SP discount and then sell them or exercise them.
I did raise issue of the Bergen warrants a day or so back but, as far as I can see, no one took up on the issue. Baits and others are right that, almost as soon as any warrants are exercised the company will issue an RNS stating how many have been exercised, the total revenue that has been received in order for them to be exercised, and what the new total number of shares in issue is. It's quite a common occurrence. Don't forget that the warrants don't count as issued shares until the exercise price has been paid. What does puzzle me is where Baits gets his £240k as the resulting income. As I said in my earlier post on the topic, if all 5m warrants are exercised the cash received would be £497,500 - quite a tidy sum, and higher than many an AIM placement. Interestingly, if exercising warrants were to bring Bergen's holding back above 3% then they would be back into the disposal/acquisition announcement regime again. Just talking principles.
Renegade - I believe the sentence was 16mths. In all fairness, regardless of my personal self-interest in fracking being allowed, that is excessive given those involved caused no damage to property and weren't violent. It also transpires that the judge has some financial interest in positive outcomes for fracking and his sister has written an article in favour. (All according to 6.00pm news on Radio4.)
When re-reading the 23 April RNS re the Bergen loan towards Balcombe acquisition I see that we also gave them 5m warrants at an exercise price of 9.95p 'with an exercise period of 48 months from date of issue'. As the SP stands the could now exercise those warrants too, if they wanted, at a small profit. My question is ... Am I right in assuming that the stated condition means that they have to exercise the warrants BEFORE four years is up - rather than that they have to wait UNTIL four years is up before they can exercise? Assuming the former, then, if we make further significant advances - to 18p say - then that's another 5m Bergen shares that will go on the selling block, as they would surely take up their rights given the right margin. On the positive side that would represent £497,000 of additional cash incoming!
Spike - I can understand your confusion as to why holdings are being reduced on positive news. If you are genuinely 'still researching' I suggest you start with the RNS of 23 April. This explains how the 'investor' (Bergen) acquired a slug of shares (initially a convertible loan to enable us to get our share of Balcombe) at a knock down rate. Their normal MO is to make as quick a profit as they can and move on to pastures new. That's what they've done (100% profit I think) over the last few weeks. It was their selling that was acting as a sheet anchor on what should otherwise have been a big alike after Balcombe results. The fact that they've continued to sell reflects their MO and not any question marks over Angs prospects. As I say - digest the 23 April RNS and ATB
Baz - Guff was getting at RealAnalyst, not you. Strictly speaking he's right. The quick board skimmer would not have twigged that RA's market capitalisation increase was not by any means all ours. It is a tad confusing that we acquired the operatorship responsibility at Balcombe but still only a relatively small %age holding.
Oiliest - Check back on posts over the last 2-3 days. Just because the flow test is of seven days duration doesn't mean they'll be flowing 24/7 for that period. We've been told the storage is adequate. They will doubtless be flowing for relatively short period whilst they juggle the variables.
What with all the expected celebration of the Balcombe test having started, with no reported setbacks, within Q3, it is perhaps understandable that Brockham has, I think, only been mentioned once. To me, the absolute cherry and icing on the cake is that, immediately following completion at Balcombe (hopefully also on schedule after seven days) the equipment will then be moved over to Brockham to start there. What with all the shenanigans and delays over SCC planning consent that will be a huge relief, and summat I'm greatly looking forward to. Double whammee time indeed!
Renegade - Not wrong at all, other than the error I admitted almost straight away re the Q3 2018 start being mentioned in the OGA investment approval RNS. I never at any point said that the test hadn't started. I merely pointed out that the start was 'subject to regulatory approval' and, at the time of my posts, we hadn't been told that that had been received. I was right - it wasn't received until Friday and Angs hadn't updated us. I also said that comms via the liaison group weren't official as they weren't vetted - true. Also that tweets weren't regulated and we needed an RNS - a position shared by Baits and others and confirmed as accurate given that the BoD later paid out for a 'proper' RNS. As I said, I apologised immediately for an error - otherwise totally exonerated! BTW - ANGS remains my largest shareholding