suggestion, page-7

vontrader

There is a lot that I agree with you about this.

In particular that the "immediate upside will now be transferred to MTL". IMO Mt Adrah is the key asset of SOC. If it proves to be commercial 'MTL' will get the big price rise and SOC can only expect 60% of the action at best.

PMR is totally illiquid .... meaning the market does not care about it. SOC's 80% is just a notional valuation while that is the story [the MC of $26M is meaningless atm]. The same will be true for MTL while the thing is still a black box.

But, if PMR starts to demonstrate substantial value people will want some direct exposure and the stock will start trading ... then the value will be tangible for SOC. I suspect the same scenario for MTL.

However, if Mt Adrah does live up to the promise then it is MTL shares you want own, if you want the full benefit. Personally, it is a problem for me because my funds are all in SOC and I am 60% underwater. Not sure yet how I am going to get anything like what I want of MTL stock.


They are valuing Mt Adrah around $11M+ for the IPO ...to get it to the 20/30M you would like to see will require drill results which actually prove the thing is economic. I followed the discussion you had with trade4profit and in the end you agreed with him that something over 1.5M would get you a better overview.

If SOC raised $2M and then put that into Mt Adrah in exchange for more shares SOC might end up with closer to 80% holding. Certainly would make my life easier if it went that way. Only thing is, with the SP as it is, what kind of price would it get away at?... probably 6+ cents. Existing SH's are getting a pretty serious dilution that way too.

The thing is, that is not Hudson Groups way of doing things......On the idea that SOC might draw all of the assets under one roof .... that seems a forlorn hope, judging the track record of Hudson Group. This IPO is more in keeping with what seems to be the business model for the group. There does seem to be the element of limiting the risk they face by transferring the risk to stake holders and catching management fees as their main source of profit.

I do not have any profound objection to that model. It means they can attempt to bring projects to market which might otherwise not see the light of day. Some of those projects will be failures and they still get paid [SHs lose] while other projects might be very successful and they still get paid but they will have transferred the upside along the way to those who took on the risk.

That is how I see what is going on with Mt Adrah. By IPOing it they are locking in their management fees and selling down their exposure. For a believer like myself getting MTL stock is where my upside is going to come from .... just so long as the thing is commercial.

I was surprised when RAF sold 8 million shares in SOC for 18 cents. At the time, the significance went through to the keeper. I now understand that is all part of Hudson Groups business plan ... take profits along the way and do not get involved with any particular project more than they have to.

If I had understood that earlier I would not have bought quite so aggressively ... but water under the bridge. As things stand I am expecting SOC's SP to recover, whether it comes from good drilling at Mt Adrah or elsewhere. It will be nice if this current drilling improves the prospects for Mt Adrah and gives SOC a bit of a kick along in time for me to buy into the new entity. Have to wait and see.