News: GGG Shenghe Resources' rare earth unit to acquire stake in Australia's Greenland Minerals, page-12

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Raffles79

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23/09/16

03:16

Post #: 19363646
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Originally posted by Apollo6642 ↑

Based on my reading of the google translated document, I understand that Shenghe Resources have been granted an 'option' over up 60% of the project, one non-executive director and will contribute on the technical side.

I believe the key here is what level of commitment (if any) Shenghe Resources will give towards acquiring/funding the project (and any purchase of end product). If they have been given a right of first refusal that is not necessarily a great outcome. If the intention is that they will be the funding partner that is a very strong signal. Unfortunately a translated version cannot provide the required nuance.

The price is fair enough as it represents the weighted average price over the last 60 trading days, which is common in transactions such as this. 3.7c is a level that has rarely been seen over the last 12 months (and only appears low due to the shares rising over the last couple of weeks). However, if this is a placing to raise cash I would have preferred a pre-emptive placing for current shareholders.

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I think this is absolutely right - the pricing makes sense but if it is simply a cash raising with nothing concrete or even a firm understanding it really isn't a smart way to go about it.

I hope you are right and when it's translated properly rather than with Google Translate there is something there to get excited about

GGG Price at posting: 6.0¢ Sentiment: None Disclosure: Held
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0 Great analysis

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