Pantheon Resources Share Discussion Threads

[dlm2602] 09/12/2021 10:00

Chris0805.

My mistake, dilution is currently 6.9%. I'll try and correct earlier msg

[probabilityofsuccess] 09/12/2021 09:57

Amortisation:
5.00% of the Initial Amount each quarter (US$2.5 million to US$2.75 million) payable quarterly, in cash or new Ordinary Shares at the option of the Company

[officerdigby] 09/12/2021 09:56

Think NGMS is referring to this line in the bonds RNS.
Conversion Right: At any time at the option
of the Bondholders


CBonds: Senior, unsecured convertible 5-year bonds,
due December 2026; issued and redeemed at
par; subject to English law
Issue subject to successful completion of
the Equity Fundraise
Denominated and issued in $
Initial Amount: US$50 million, with Company option to upsize
to US$55 million subject to raising at least
US$25 million in the Equity Fundraise
---------------------------------------------------------------
Coupon: 4.00% per annum, payable quarterly in arrears,
in cash or new Ordinary Shares at the option
of the Company(1)
---------------------------------------------------------------
Amortisation: 5.00% of the Initial Amount each quarter (US$2.5
million to US$2.75 million) payable quarterly,
in cash or new Ordinary Shares at the option
of the Company(1)
---------------------------------------------------------------
Conversion Right: At any time at the option of the Bondholders
---------------------------------------------------------------
Conversion: Initial Conversion Price : 20% premium to
Issue Price
Reset Conversion Price : The Conversion Price
may reset down at 9, 18 and 30 months, depending
on Ordinary Share price performance, according
to a formula and subject to a hard floor of
65 pence ("Hard Floor")(2)
Reset Clawback : Following any reset, the
Company has the right to revert to the prior
Conversion Price, if the daily VWAP on each
of at least 20 trading days in any period
of 30 consecutive trading days is greater
than 150% of the Initial Conversion Price.
The Company may only exercise one Reset Clawback
during the term of the Bonds
----------------------------------

[ngms27] 09/12/2021 09:54

Chris0805, sure they can have mine for 150p in the next 6 weeks as I previously stated. Once testing commences the offers off the table.

As usual for Guilders I'm being quoted out of context...

[ngms27] 09/12/2021 09:44

Chris0805, that's the interest component which I've not even counted for...

The CB holders decide within the 5 year period whether to convert or not, not PANR.

[chris0805] 09/12/2021 09:42

If you read the RNS, PANR decide whether the payment is made in cash or shares, NOT the CB holder... It's worth reading before commenting Best to read it twice really, you may absorb it then. If your scenario plays out we will all be very happy, especially yourself as you will have sold out. You frequently quote they can have mine for 150p remember?

[michaelsadvfn] 09/12/2021 09:38

Just THICK!!!

The CB holder does not choose to opt for shares...PANR decide!

[ngms27] 09/12/2021 09:34

Chris0805, note I did state in the success case ;)

So lets say the Talitha testing goes well and the shares trade at 150p. If you are holding a Convertible what would you do?

Well in my opinion they will convert and many will instantly sell for a nice little earner.

[officerdigby] 09/12/2021 09:32

Yes but the clever bit is that it is not dilution... yet! And may not be.

So for immediate situation PANR is in, it looks better.

If there is a successful drill campaign no one will care about the CBs.


If the drilling fails. Another story. And it be arguably just as bad with or w/o bonds.

[probabilityofsuccess] 09/12/2021 09:30

…….if PANR choose to pay in shares, not cash, which they have the option to do.

Anyway, in the success case, everyone (😉) will be happy.

[chris0805] 09/12/2021 09:30

Dilution is 6.93% currently. It will remain at 6.93% if the CB is repaid in cash, with the associated interest. It will increase, up to ~15% as you say only IF all of the CB repayments are in shares...It could be anywhere in between.. personal opinion is that the first 2 repayments will be in shares, increasing the dilution slightly... after that who knows?? In reality that is a variable that will play out over the next 5 years, would you agree?

[michaelsadvfn] 09/12/2021 09:28

Nonsense, as usual ngms. You clearly have not read the terms of the CB have you?

For once in your life go and read something properly until you understand it.

Here’s a couple of points to begin with...
- the Company(PANR) has the option to repay in shares OR CASH.
- The Company may repurchase for cancellation all or part of the outstanding Bonds, at any time by means of tender or exchange offers

[ngms27] 09/12/2021 08:56

dlm2606, it's not 4.5% dilution though is it. It's a Convertible Bond NOT a Bond.

In the success case there will be a whole raft of new shares @ 78p, in fact 70.5m.
in the news release the current equity dilution was also higher:
The New Ordinary Shares and the Additional Subscription Shares represent 6.93% per cent of the issued voting Ordinary Share capital of the Company prior to the Equity Fundraise.

So real dilution is above 15%

[michaelsadvfn] 09/12/2021 08:24

...and, given Jay’s age(73/74?) unless he’s ultra-confident he ought to be taking the safe route with his savings.

[dlm2602] 09/12/2021 08:20

The convertible bond offering seems like a very smart choice designed to raise funds without necessarily diluting shareholders. As I can make out, the convertible bond holder receives 4% per annum over 5 years (20% in total) which can be paid in cash or PANR shares. There are certain safeguards, but if PANR shares do not fall significantly then the price of PANR shares assumed to pay the interest payment is 78p which is a 20% premium to the placing price of 65p. It is PANR's decision whether cash or shares are used to pay the quarterly interest payment. Note the 20% interest earned over 5 years is offset by the 20% premium in convertible bond.
Similarly, the convertible bond is paid off over 5 years with quarterly payments of capital of 5%. (5% x 4 quarters x 5 years =100%). Again, this payment can be made via cash or the delivery of PANR shares at the assumed price of 78p.

There are certain protections given to both holders and the company in the event of a volatile share price, but assuming a rising or stable share price where the bond remains in place for the whole 5 years and the company pays both interest and capital with shares valued at 78p then the outcome of the bond in terms of shareholder dilution is broadly the same as the original placing at 65p but staggered over 5 years. The 20% interest received over 5 years is broadly offset by the 20% premium of the share price used in the conversion to cash.

However, the company has the choice to pay both the interest and capital in cash instead of shares. If they do pay in cash then this will reduce the eventual dilution to shareholders. I can think of at least 2 reasons why the company created this convertible bond:

1) That any cashflow from a successful Alkaid production well could be used to pay both the interest and capital. But more importantly...

2) A successful early farm out would include a cash element that would pay off the entire bond. Thus for a small(ish) $41m placing (6.9% dilution) the company has guaranteed its 2022 drilling program yet has still left open the possibility of a farm out without unnecessary dilution to shareholders.

This is AIMHO and using broad brush assumptions for the mechanics of the convertible bond. The fact that the company chose to use this structure makes me think that we are very well advanced in the farm out process.

[bit coin] 09/12/2021 08:13

I can honestly say that after seeing how many Jay and Justin subscribed for, I am more confident now than when I first bought in during the reign of Sue Graham in 2006 and watched the share price soar above 100p

[inteligentia8] 09/12/2021 07:33

Oil is here to stay : Yahoo Finance: Fossil-Fuel CEOs Strike Back With Warning on Energy Transition.

[ningalooreef] 08/12/2021 22:50

Thanks POS, I tried that but unfortunately still no luck getting the reports to appear. However, a regular poster very kindly lodged 5 coins to my account so I have now been able to join the other thread.

[probabilityofsuccess] 08/12/2021 20:50

No worries - it’s nearer the 71p mark now! Let’s see where it closes 👍

[rideacockhorse] 08/12/2021 20:47

Ah, OK. Happy to be corrected POS.

[probabilityofsuccess] 08/12/2021 20:11

OTC price is 69p equivalent (only down 1% because the balance was reduced last night post fundraise announcement when US was still open).

[antique7879] 08/12/2021 20:03

The next two years will be critical for the sanctioning of new projects to make sure that there is enough supply coming online within five to six years, the report noted.

“Insufficient upstream investment would result in more price volatility and spur adverse economic consequences,” IHS Markit and IEF say.

The report echoes the concern of many industry professionals, who have said in recent months that underinvestment in oil and gas threatens future energy supply because oil and gas will be consumed for decades to come, regardless of the pace of the energy transition.