glencore "very interested", page-31

Hi Matt, Baukaw and fellow shareholders and SDL posters.

Been quiet for a while - long stint in cooler. Refreshed now.

My question to Matt/Baukaw/anyone else is what the affect of a Glencore farm-in will have SP say in 6 months time?

First of all, my taking on recent development:

GJ/GC new the deal was in jeopardy - started making noises in press about plan B - GC stating western interest and expressed satisfaction that "Mbalam" will be developed, with Hanlong or whoever, but it will be developed. At this stage it was certain that if H/L deal falls over, another party would step in straight away SDL being mindful that project funding needed to be locked in in accordance with mining convention.

GJ & co recently had meeting in China with H/L but, if I'm not mistaken, also with some steel companies. At this time, IMO, the steel mills have been advised of Plan B (being Glencore)

The no-show by H/L yesterday was perhaps a last grasp at the straw by GJ (for 45c) and the no-show probably just P...D him off a little more. But GJ already knew that things were to change.
To sooth investor fears - a little leak about Glencore.

The state of play:
Termsheet will not be delivered - H/L will be cut loose (I hope with breakfree penalty) and will be told to come back with cash in hand.
This opens playing field for Steelcompanies in China to step in without having to deal with H/L.

But with Glencore stepping in (say farm-in 3.5b on infrastructure and port with sdl to raise some capt or perhaps full 4.5b farm-in for majority stake in production proceeds) it will not be easy for H/L or anyone else to come with a lower bid than 45c. Glencore will have too much skin in the game to give away it earned-in interest on the cheap.

That means SDL share value should grow as developments progress - if China think they can do without this I/O resources - they must continue to pay market price as set by the big 3. Or it could come out blazing immediately to stop the JV from materialising and come with a 45c upwards offer to secure the resource. If not, and China (through steelmill) want to step in later, the price will have to be higher due to value added by Glencore.

My understanding is that the rail and port is currently backed by MOU's so no binding contracts. Current MOU party can be replaced by Glencore.

On this scenario, the JV looks to hold good value.
So by way of repetition - What could developments of this nature have on the SP 6 months from now. I understand that this is all speculation but history would have given an indication of what can be expected??

Thanks