Well the 'change in the short term' is a year-end cash-call. There are several possibilities as to how that might be resolved, from a financially supportive JV to a desperate rights-issue. Something will have to happen and you can exclude any near-term sales of pig-iron. Personally, I doubt Redbird will be allowed to increase their stake any further (without a takeover)...
Why is it a 'de-ramp' to explore a scenario? Personally, I doubt 'going private' is all that likely a scenario these days. In BAO's case, Redbird hold such a big slice, it would be simpler to takeover the company first. The 12 month rule would require them to bid ~20p/share, but I doubt they would really want the whole company. It would have to be pretty desperate (financially) for BAO, for such a bid to be made (and succeed). On the other hand, such a scenario is not impossible, if post DFS the project remains stalled. However you look at this going forward, the 'future' always comes down to who/when is the (deep-pockets) JV partner for this pig-iron project?...
This is what is stated...
Any increase in Redbird's aggregate shareholding up to 50 per cent. of the voting rights arising other than from the issue of the Conditional Placing Shares or the exercise of the Conditional Placing Options or Third Tranche Options will be subject to the provisions of Rule 9 of the Takeover Code.
By AMED, you are presumably refering to Redbird's holding? If shares were bought in the open market (increasing their holding), it would necessarily trigger a takeover bid. Redbird are already listed as owning well over 30% of the company (by virtue of a voted takeover-code waiver at the last placing)...
These ongoing negotiations are the only reason I can think of, don't think smelter results are going to do it. We need that funding/JV/takeover RNS nothing else will do it IMO.
WAFM buying started
West African Minerals Corporation (WAFM) Takeover Talk,Jindal Steel and Power (JSPL) is close to acquiring an iron ore mine in West Africa to secure raw material for its recently commissioned steel...- Today, 10:41 AM
pete is that the same BHR that supposedly rejected a takeover at around 16p a few years back ?
I was having a think last night about why we have heard so little from the company both in terms of news and also responses to emails. I know my emails, Kenny's and some others have gone unanswered. Now we all know the board are very investor friendly and always respond, so why not now?
In my opinion something is wrong or more likely right. Is it too fanciful an idea to suggest they are in deep negotiations with a major with a view to takeover or JV with a condition of the negotiations, a complete embargo on communications with PIs, as they do not want to influence the SP prior to an official bid being made.
Rubbish theory or not ?
IF AMED did buy them they would then be subject to Rule 9 of the Takeover Code...
kbrook, spot on.
or we could sell the asset for a nominal fee.
question I have on the hypothetical question is:
would the IFC let this happen
would AMED let this happen
the IFC have very deep pockets and one can see them increasing their stake with an investment.
and also, Standard will have done a really really poor job if they fail to find a funding stream/JV or Takeover (Standard themselves have very deep pockets and will fund this as a last resort imo!!!)
6k, the issue with that price = Â£150m
so, if Vale offered Â£150m do you not believe that Nippon would offer Â£200m.
and then RIO could offer Â£250m etc. It is possible and likely.(in principle, ignore the numbers).
you have to have realistic expectations of course I understand but on a 2mtpa this is about $450m profit per annum for a long long time. Companies such as those I listed need junior exploration companies for their own growth and I firmly believe that one of these company (or another) will need to offer an amount that cannot be beaten.
I remain expectant of around Â£1 in the shorter term but more so on a full takeover, dependent of JV terms than your valuation is more likely to apply.
If we don't move on the next RNS releases , namely smelter test results and MOU's and stuff then I think the only hope for explosive sp action will be an outright takeover.
Any increase in Redbird's aggregate shareholding up to 50 per cent of the voting rights arising other than from the issue of the Conditional Placing Shares or the exercise of the Conditional Placing Options or Third Tranche Options will be subject to the provisions of Rule 9 of the Takeover Code.
Yes they have a Rule 9 Whitewash from the Takeover Panel
I agree, the IFC will want a fair price. They hold shares as well & hold 15% of the company outright.
i am sure BJ and JD will also want the right price for their shares although may be subject to a deal post any takeover here.
i just think we are in the dulldrums because all mining stocks are. To much hype regarding news in the first quarter which hasnt come and now people are getting inpatient.
Im not worried, other than I would be happy to top up with more at 9p+.
20p would only value us at Â£70m and I personally cant see any PI agreeing to 20p. If AMED (who could own 37% - and have waived the right for a t/o) do try a takeover I dont know how much they need to force PIs to sell.
Fact is, we have the quantity, quality and if PFS remotely correctly the cheap OPEX. A large international company will want us, or be a part of us.
A cheap takeover I reckon. Someone wants this company on the cheap. What at what price would they prepare to pay? I would be happy with 30p
the only problem with that route is that there is no profit for shareholder during the first 4 years of the offtake agreement. I would rather do a 500kt offtake for 6 years (for the CAPEX) and sell the remaining 500k to generate a profit.
don't forget in sny offtake we will still need to find the relevant OPEX costs.
we need a full takeover to generate maximum value/shorter timeframe, unless we can get the financing to go this alone.
Thanks for your replies 2phil. But I wasn't questioning the overall reason for AMED lending us the dosh we currently need - still at a high price, but que sera. I should've been more specific and just quoted the bit I was commenting on specifically:
"and beyond that date we expect partnership or takeover to accrue full value to investors."
It is this that I was wondering aloud if the BoD had ever said such a thing...
Or, as I suspect, it is just your take on the ultimate goal here?
Not that I don't hope for either myself of course, but if we have actual evidence of BJ or anyone saying either then I'd be interested in seeing where!
I know, its laughable, no wonder we are where we are.
JV for CAPEX
Offtake for CAPEX
Government Funding / Stake
and probably lots of other possibilites
There are three parties here who count in the debate about further dilution. AMED/IFC/BOD. I would think all of them would be reluctant to sanction any more dilution and I would have thought that would have been a prime consideration of AMED before going up to 37%. If we take this to BFS/DFS with a payback time of 4 years or less, I think there will be a bunfight to take it on by a full buyout. If there isn't, I would think SC could cough up the finance for the current owners to take it to production (plan B). So, I consider bones is being overly pessimistic. The CAPEX is big, but so is the return.
Edit. P.S. The reason we sanctioned AMED's 37% is so they could provide funding to DFS without any further dilution and beyond that date we expect partnership or takeover to accrue full value to investors.
If one was to take a cynical view ,I'm not deramping as I am a LTH,is it possible that someone was planning a takeover and wanted to pay peanuts then it would be advantageous to depress the SP for a significant time period.When they come in with a bid for the whole company then they quote their buy out price based on the average price of the SP for the past 6-12 months .
Having been in this game for so long and been bitten once or twice this thought is in the back of my mind
I really hope I am way off target and feel free to shoot me down if you think I am way off the mark.
What if the large seller was actually a failed attempt at a hostile takeover here and is just now getting rid of.AMED agreement screwed up their plans perhaps.