BEKEM METALS INC: announcements explained, share price

Announcements, explained

Each one in plain English, with the numbers worked through for a shareholder.

17 Dec 2010capital raising announcement▼ BadMajor

On December 15, 2010 Bekem agreed a $500,000 loan from Techgroup Finance Limited at 15% interest, maturing May 31, 2011, secured by 65% of the stock of its subsidiary Kazakh Metals, Inc. (effective on Kazakh ministry consent). Techgroup can convert the debt into shares at $0.0029 each, which would give it about 57% of the company and a change in control, heavily diluting current holders. Bekem also promised to deregister its shares and stop reporting under the Exchange Act within 120 days, which would end public reporting. This loan is far smaller than the $28,000,000 raised in 2006; the filing does not state why it was needed.

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18 July 2006capital raising announcement▲ GoodMajor

On July 14, 2006 Bekem closed a private placement of 8,000,000 units at $3.50 each to two non-U.S. investors, raising $28,000,000. Each unit is three restricted shares plus a warrant at $2.00 for two years, so 24,000,000 new shares and 8,000,000 warrants are issued, diluting existing holders; the filing says there is no change in control. Placement agent Aton Securities gets a 5% cash fee ($1,400,000) and 2,400,000 warrants at $1.17 exercisable for eighteen months. This follows the earlier need for exploration funding.

What it means for a shareholder

8.0m new shares at $3.50 to raise about $28.0m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.

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