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03/05/17
15:13
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Originally posted by Az888
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Hi Beisha
I'm not privy to specifics relating to your questions but I'll do my best;
1) I'd say yes.
2) This speaks to my original concerns - That depends on how well they can do a deal. If PIO can't get up front cash, then a CR would be on the cards if cash is an issue.
3) don't know anywhere near enough to comment
4) If your numbers are correct
The rest of your assumptions based on the previous, would be fair.
The issue you don't mention - which would be very real if what you hypothesise comes to fruition - is the takeover.
If the deal includes a Cabots, then I'd be nervous. A market cap of 20M is in the firing line. If I were Cabots, I'd buy the company, keep the Dome and sell off the other parts. If the value of PIO is soley based on the Pollucite, it'll be in the cross hairs.
If the deal is with a middleman -could be a safer position until that MC gets up to higher ground.
My "negative" comments to which you usually hang me for are based around 2 things. Strategic thinking and the ability to do a good deal. They are intrinsically linked - most people don't know that - or at least it's not demonstrated. They do deals the same as they've done before, or they've seen them done before.
The truth is PIO shouldn't be trading at its current price. It largely has to do with the strategic thinking, ability to do good deals and then communicating that effectively to market.
Trying to make a play in a commodity nobody knows anything about and not having an effective plan to deliver that play to market (doing the same thing you've done before with a KNOWN commodity which the market can value) is not smart. That's what PIO have done here, hence the SP.
That's what they've done and that's what I've been critical of.
Obviously as the market catches on and value is seen it will re-rate...but all the large LTH have had 17 quadrupal by-passes before that time.
It was unnecessary.
But, if you're right with your numbers...then i believe, in the end, all will work out.
It DEFINITELY could've / should've been handled better than it has been.
IMO
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Two things.
My figure of $15,000 a tonne of pollucite was after making a generous allowance for mining and shipment costs and before the 18% increase by Cabot.
I believe that John Downes, the leading world expert on pollucite and all things caesium generally, is currently working for PIO in some capacity, so they will have the best available advice on marketing.
As to the mining costs, this would be on contract and the current cash should cover the cost, if it leaves the cupboard bare. With a firm sale contract, loan finance should not be difficult to arrange.