Thoughts on Strandline (STA) please?

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Question asked 04/08/2023

Thoughts on Strandline (STA) please?

Hi James and Team Strandline (STA) -as per your note on Tue STA raised $33m at 18c in an institutional placement. There was strong demand for the raise, but they elected to upsize the deal which likely weighed on secondary market support. We did not participate. As you did not participate in the raise can I have your view for those still holding some STA on the SPP. With the stock sitting at 17.5c - Would you hold the view of only participating if the share price reaches the 18c plus 5% premium (19c ? ). With the funds available to progress their projects do u see upside now after the raise? regards Debbie

Answer

Hi Debbie,

Firstly, just a note to say we cannot provide Personal Advice regarding your investments. The following is General Advice only.

While we like Strandline (STA) from a high level perspective and, in our view, the current depressed share price will prove cheap at some point down the line. Upsizing the raise would have been frustrating from a shareowner’s perspective in that it dilutes investors and signals that the cost and operational issues may be more significant than thought. The size increase has also put more pressure on shares which quickly traded below the 18cps raise prices. For a company this size, a discount of 5-10% would make more sense before the SPP cut off on August 21st.

We are looking for signs of operational improvement before considering Strandline (STA) again.

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Strandline Resources Ltd (STA)

LAST UPDATED 03/08/2023 11:30

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