Metal Tiger placing has created some unrest amongst smaller private investors with many believing the dilution of their shareholdings has benefited the BOD and major investors.
In fact the BOD and major investors have also seen their shareholdings diluted.
So why has the Metal Tiger placing happened when the share price so low?
What we do know is MOD have said they intend to drill the life out of T3. To do that they need funding.
We now have A$5.46m (c£3.19m) raised by MOD resources with institutional investors partaking. MOD Resources are ready to start drilling T3 in early January 2017.
What would have happened to the MTR share price if they hadn’t already had their placing? In all probability the MTR share price would have gone down as investors would know MTR need to fund 30% of the T3 exploration. This scenario would have resulted in the MTR placing being at lower levels than has already occurred.
It looks like MTR had no choice but to raise the necessary funding when they did.
We know the CEO of MTR and MOD BOD members, together, attended meetings with potential funders during MOD boards recent visit to the UK. Is it possible as a result of these meetings, institutional investors indicated willingness to invest in MOD?
If that’s the case this could explain why MTR offered warrants as part of their placing and MOD haven’t.
It is going to be interesting to see what happens to the share price of MTR as a result of this news.
Investing is about the transfer of wealth from the impatient to the patient.