waiting for news

While we await news on the “deal” here are my thoughts about where this could lead.

AMED has links to Pallinghurst so I think the long-term plan includes some sort of tie-up of NKP assets with Pallinghurst. AMED is a facilitator of deals and is in it for a short-term gain so my opinion is they will try to buy a big enough stake in NKP to give them a say on the future direction and then offload their stake at a premium once they get funding and development in place.

Pallinghurst is bullish on PGM and want to become a big player in these metals so getting hold of Garatau makes perfect sense. Folding NKP into Newco will give it more resources, more relatively low cost production and as a multi-mine company will enhance the value when it relists on the JSE in 2013

I can’t see AMED being content with buying only 10 or 15% of NKP because if IDC buys in there will be dilution and if Genorah vests their 26% direct interest there will be further dilution (although the project base becomes larger) so a 15% stake now could end up being less than 10%. They may not be able to get a majority stake because of Genorah but they may push to get at least 45%. They could buy 20 or 25% direct from Genorah then try to buy out minorities. I think if the price is right (35-40c) they would be swamped with shares. Then they can de-list from ASX and maybe vest the assets into Newco in exchange for shares.

Negotiations are apparently taking place now between AMED and Genorah. These negotiations may not just be centred on price but also the actual stake AMED wants to buy versus the stake Genorah is wiling to give up.