Brian,
You are wrong. Yes, the price isn't fixed, but if you think about it, a minimum price can be calculated. I believe that WSP is restricted to issuing a maximum of 20% of their issued share capitalization without calling a special shareholders meeting. There are about 39.24 million issued and outstanding so the most they can issue in the PP is about 7.8 million shares. What RT was smart enough to fix was the amount of money to be raised. For the sake of discussion and to simplify the math, lets assume each special warrant is for 1.5 shares. That means that the maximum number of special warrant that can be issued is (7.8 million shares)/1.5=5.2 million special warrants. The amount of money being raised is $14 million so the minimum price is ($14 million)/5.2 special warrants = $2.70 per special warrant representing one share and one half share purchase warrant. If the one half share purchase warrant attached to the special warrant is exercised, up to another $7 million could be raised. That brings the total moneys raised to $21 million. So, if WSP raises $21 million here, plus $12 million from the existing warrants, plus $6 from the sale of diamonds, plus $4 million from options, they have their 84% share($42 million) of the proposed 50 million budget. I don't see a problem with this financing. Anyone selling now will regret it later:-))
As an aside, if you accept MRDI's estimate of a 42 million carat resource at $US105/carat valuation, the disputed 16% interest(discounted to 10 cents on the dollar) is worth over $CDN100 million-that is about $2.00 per share for Winspear. Worthwhile fighting over eh?
regards,
teevee |
