tickets please, page-33

Wow the rumour mill is running like wildfire now. Joint Venture and now low ball take over.

Asked a couple of brokers with regards to the rules and guidelines with regards to some of the takeover rules and here is a summary:

If Genorah wants to launch a takeover then there has to be an independent valuation done to signify that the offer if “fair and reasonable”. An independent valuation has to be done if major shareholder launches a bid for control. If NKP is still going ahead on the purchase of 15% of Tubatse for $USD55m equivalent then NKP would be in the range of at least $400-$500m so its 65c+. I admit that this valuation is an old one and a new independent valuation is may be done. However the Tubatse does not have a mining license yet but Geratau does. So a valuation now may be more complicated.

The other rumour is that it’s a Chinese low ball (or opportunistic) offer. Given South African law the BEE needs to maintain a 26% interest so if the Chinese buy out 74% stake there would need to be an independent valuation done anyway. Also Genorah would need to sell some of their shareholding if this is to go ahead. Then the question is would Genorah sell their portion for 30-40c per share (as the so called rumour suggests). I am inclined to think NO, but anything can happen.

Honestly I would just concentrate on the Optimised BFS or DFS for now. Seems that new rumours pop up out with this company whenever there is some excitement. If there is another delay then I can only assume that a Joint Venture or Takeover still has terms and conditions to be polished off. Back to the “imminent” again.