Don't be a sheep ... sheep get slaughtered, be a wolf !
In all this discussion of the mechanics of the SFR offer, i think we're getting lost in space. In my sweaty little palm, at the end of this process, what do i get? No one can answer that, due to being tied at the hip to SFR's daily volatility (one mine company, running out of ore reserves, with its own valuation reflecting this situation), and there you have the prime weakness in this offer. Not only is it nowhere near fair value for Mod's assets, it isn't even certain value at 45cps. So if 38cps was rejected by these warriors on our Board, why do they limply accept a largely scrip offer which has traded narrowly above that price? This is about Board independence ensuring value is being delivered to all shareholders, not just a few. Surely, there are enough large minority investor institutions to record >25% against the Scheme, which would defeat it. This small number of instos can pressure a higher offer, with more cash. Who knows maybe even a MOD Director might even think carefully about his duties to shareholders? I personally would fund a new copper mine into production and multi-bag my investment, rather than pass the benefits to SFR for peanuts.
Compare two figures, and ask this MOD BoD how it can reconcile them -
1. Mod presentation (Africa Down Under, 4th Sept., 2019) - page 14, "T3 Compelling NPV US$368m" (pre tax, 8% discount rate)
2. Deloitte Independent Expert Report (page 151, Scheme booklet) - "value range of A$107-129m", for T3.
Do they think we're stupid? You're left with two alternatives - either the MOD valuation widely promoted in the FS is hopelessly overoptimistic, or the same group of people are commissioning an Independent Expert report, publishing it, and recommending a bid reying on an (under) valuation nowhere near their own valuation. What can i conclude other than the option and performance buyouts and retention payments, the Metal Tiger cohort, have influenced the BoD recommendation? If you can reconcile the numbers above, you're smarter than me, but this is what gives small miners a bad name, and they wonder why access to equity capital is tough ....... gee, i don't think we need Sherlock here? No thanks.
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