UK 19:50 Sunday, 25 October 2026
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
On January 17th, Edenville Energy (EDL) caused outrage among its shareholders when it placed £1.4million at 0.07p. This was a greater than 50% discount and illustrates exactly the problem, which faces cash strapped junior would-be miners. Without sufficient backing, the “assets” these companies own are, to all intents and purpose, worthless. Today, Edenville has hardly helped any attempts at making a value case for this stock, as it placed again. This time it raised £250,000 at 0.06p. Further dilution, for such a small amount and at this awful price further calls into question Edenville’s viability. Oh, but hang on moment, I heard its shareholders cry, what about the Expression of Interest the company signed only nine days ago? Well...
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Comments
J P Spaghetti
Only just seen this!
“Less fortunate was anyone who bought stock off the back of this…”
Indeed. Did anyone else spot the significant transaction by a certain Christopher Potts the day before (literally) the £1.4 million placement in January of this year at a discount of over 50% mentioned in this article. One which – understandably – caused the share price to fall off a cliff?
I wonder if EDL’s ticker really is – well – ticking-off would-be investors or whether those in the know are keeping their distance because of more fundamental reasons. I mean, despite the valid points made here, the price is ridiculously low given the size of its asset base.
J P Spaghetti
Re. my first post (and I use “placement” once again here rather than “Placing”), let’s also bear in mind their change of Nomad at the time of the £1.4 million placement. Grrr… and grrr… again. Trying to be a littler more forensic about the issue, though, here’s another aspect to it that didn’t wash with me. Quoting from EDL’s 2013 End of Year RNS issued in June of this year in respect of its Darwin draw down facility
“On 27 March 2013, in order to provide the Company with sufficient working capital, the Company entered into an equity financing facility agreement (“EFF”) with Darwin and Henderson Volantis (“Darwin”), an existing shareholder. It provides Edenville with a facility of up to £5 million which (subject to certain limited restrictions) can be drawn down at any time over the next three years. The timing and minimum subscription price of any draw down is always at the complete control and sole discretion of the Company. “,
we see that there was an alternative means of generating a significant amount of cash to this ludicrously discounted placement. Furthermore, the same RNS goes on to quote the Chairman in respect of it
“The Directors recognise that the Placing was at a significant discount to the prevailing share price at the time.”
and this surely constitutes a realisation of the detrimental effect this was going to have on the share price (they’d surely have been acting incompetently to have not foreseen this). Reasonable? I thought so too.
So – here it comes – given that they are obliged to act in the best interests of shareholders, to have chosen a means of raising cash that so disadvantaged them over a viable alternative can only imply urgency or something rather less wholesome. They therefore claimed urgency passively (as urgency can be passive). However, no such urgency has come to light since this placement occurred. To my mind, then, they misled the market (and no doubt caused many to unwittingly jump on board in the process).
OK – rant over and time for me to booger off and get some sunshine!