The share offer by Archer Exploration (ASX code AXE) was heavily oversubscribed but the directors decided to accept more money than they originally said they would. They received applications totalling nearly $6.5 million, but have upped their limit from $2.25m to $3m. As a result, the scale-back was not as severe as it might have been.
Shareholders will get almost half of what they asked for (46.45 per cent). For the Punter, it means an additional 93,080 shares for which he’s paid 7.5c each. At the time of writing, the market price is 11c. In addition, he is entitled to apply for one free option for every two new shares.
They will give him the right to buy even more Archer shares at 7.5c each, any time before the end of February. Those options are “in the money” even before they are issued. The Punter has decided to sell 23,080 of his Archer shares, to lock in a small part of his profit and reduce his total holding to a neat 80,000 shares. He is happy to hang on to these, telling himself that the recent drop in the AXE price merely reflects short-term profit-taking by those who, like himself, applied for more shares than they wanted.
The company has ambitions to become a vertically integrated producer and manufacturer of graphite and graphene. It now has a bit more money than it expected to pursue those plans, and will get even more if and when shareholders start using the options to buy more shares. While graphite is the main game for Archer, soil sampling at its Blue Hills copper prospect in South Australia has been encouraging.
Meanwhile, the Punter is intrigued by the initial public offer of shares in Duxton Broadacre Farms. The company’s main asset is a 14,344ha wheat and canola farm at West Wyalong, with two smaller properties near Forbes. The shares, offered at $1.50 each, will have the ASX code DBF, and does not close until December 22. The Punter sees no need to rush a decision.
- The Punter has no financial qualifications and no links to the financial services industry. He owns shares in a number of companies featured in this column.