While, again as previously advised, the Company can provide no guarantee of a transaction being completed in the near term, evaluation activities are progressing on one near term acquisition opportunity that may deliver a production and development profile to the Company.
I can't help but feel that this is why the buyback has ceased - to avoid a perception of funny business when closing a deal. Underlying value is still around 40% greater than the current SP, so value is clearly not the issue - especially given that management were happy to buy at 6c. At that time underlying value was around 8c, without factoring in the Cooper blocks. We are still worth 7+c on an asset basis.
It's just hard to know how to interpret the bolded statement above. I can't see BYE or OEL wanting to divest any of SM71; so I think we are looking elsewhere. The only way SM71 divestment could come in is with a complicated deal involving the BYE shareholding, convertible notes and options. But even then I can't see the real benefit for BYE. Management seem too risk averse to take on debt; which makes me think that any acquisition will either be script based or not that large (given our cash position).
In the end, I imagine we will either hear something soon or the buyback will start again! I'm just hoping that they can nail something that is decently cash flow positive to help fund the Cooper block work/Biv Peak development (upon any success).
MEL Price at posting:
5.2¢ Sentiment: Hold Disclosure: Held
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