major corporate transaction , page-24

This week/month/ year will be interesting to say the least for shareholders of PLV.

The imminent announcement relating to our prized iron ore deposits (well at least speculated) on Irvine Island may take any number of forms, some of which have been mentioned already in this thread.

Given that under most JV agreements the existing JV partners would normally have the first right of refusal with any sale by another partner, Cleveland Cliffs would have first dibs at any sale of PLV’s 50% of Irvine. Provided that CC did not want to purchase the remaining 50%, PLV would be free to canvas other potential purchasers. There may however be an existing JV partnership clause that CC does have to agree to whom the new JV partner could be. This may be a sticking point and why it has taken so long.

I would say that any outright sale of PLV’s 50% stake would be unlikely given the huge success that Tony and the rest of PLV management have had in obtaining the necessary concessions from the Mayala People and the WA Enviroment Minister, all with in 2 years. None of which was previously attainable when the tenement was under the ownership of BHP or Portman. Any new partner would be desperate to maintain PLV as JV manager. The managements experience and expertise alone makes this a great company to invest in, this is evident from the posts that Tony leaves on HC.

Some have mentioned spinning off the Tasmania assets; I don’t think that this would be prudent given the limited commentary in 4C’s and small capital expenditure that has been spent over the past year. I also don’t think that the value of the Tasmanian prospects has been factored into the PLV SP, which means the SP may only improve once greater exploration is completed.

If any major share placement was to take place to a third party wanting to gain access to PLV’s Irvine project it would have to be at a SP and dollar quantum to see that the existing shareholders were not disadvantaged (remember PLV board and previous board members hold a crap load of stock). Given that the exploration program on Irvine is not yet complete, PLV’s cash levels and the program has been set to include numerous drill holes in the Hardstaff and Isthmus regions, I would speculate that any placement would need to be great enough in dollar value to see that all further drilling on Irvine was compelted and JORC results posted without any need for further capital. As this could run into the many millions of dollars and the PLV SP languashing in the 70 – 80 cps range, to offer stock at the current SP to an external party would be heavily diluting to existing shareholders. Based on Tony’s previous posts and how valuable the project has been described in ASX annoucements, I don’t think this is an option. If however the interested party did desperatly want in on the project, then a significant premium may be requested. Do no forget that before the GFC or any meaningful assay results were released the PLV SP was trading well over $2 per share. The prictures alone in PLV’s announcements show the island is like a massive rusted rock! Even though JORC results are necessary you can see from the diagrams released that PLV has the tonnage that they are aiming for. No wonder their assay results have been so encouraging. I would expect that any significant placement (if at all) would be negociated at this price or above.

That’s my 2 cents anyway, happy trading, I’ll be, and have been an accumulator in this stock.