Ecora Resources Takeover Rumours (ECOR)

Thanks, deacon. Not a very bright outlook. Realistically, as I see it ECOR can't do much to get out of the short to medium term hole it has dug itself into (asset sales to fund a pivot would be at a cracking loss, it has no cash on hand for significant further purchases, and any equity raise would be at a heavy discount to an already depressed SP), so when the Kestrel money stops it will very likely fall to a low ball takeover bid from a stronger player with a better balanced asset portfolio which can afford to wait for the ECOR assets to become productive. Ecor share buybacks will only serve further to reduce its capital available to make purchases to fill the short to medium term revenue gap, making it even more vulnerable to a low ball takeover, and at a lower price.

BHP inherited West Musgrave through takeover of Oz minerals, all development decisions were made by Oz prior to acquisition. On review Nickel ore low quality ie have to exctract a lot of ore as concentrate low., but as you say may return 2027. Point is whole division loss making & in very isolated region. Does not make sense to keep pouring cash in until Nickel prices recover. Best case restart 2027, but even then no royalties for Ecora till I guess 2030. Worst case project suspended. Would have made sense when Ecora purchased to stagger payments, as buying a royalty, 10% upfront & balance when royalties start. Why pay all upfront?.

@1knocker: Which assets, do you think, make ECOR an takeover target? And for whom? The only one I could think of would be Deterra, but they are buying now Trident, don't think they buy another company right away.

This really has become a stinker. Lowest price since 2015. Even on a BB it is difficult to see how anyone can claim to be in the blue. Most will be lucky if they are down less than 50%, though on a total return basis it is not quite so bad. Unfortunately, though the dividend is flattered by the falling price, the return on capital invested by existing shareholders is not. Frankly, if ECOR is not a takeover target at this price the potential purchasers must take a very jaundiced view of its assets. Very depressing. Wish I had a better idea of what a fair value might be. Not so long ago I thought it might be about 100p, and a year or so back I thought it a buy under about 140. There were even those who hoped for 200p, though that always seemed a stretch to me. It has been a precipitate fall since the change of CEO, though from the company announcements it appears that the BoD thinks they are doing just fine. .

We are still generating USD28M ex Kestrel, we earned USD41M from Kestrel in H1-2024 plus the extra deliveries tbc from VB going forward, not that bad here for 2024/25/26, but the income outlook from there out is less clear, annual dividend payouts are now just USD11M a year now so the payout is well covered, we are still moving going forward, but disappointing news this morning from BHP. Could be time to average down soon and keep for the longer term IMO too, maybe we become a takeover target at these prices too..?