Newcrest take over, page-9

I'm glad to see the change in tone over the past year. Last year, many people were hanging on to a belief in the quality of AZY's resource being the driver for a big share price lift. It just required the market to wake up! (because only HC posters can see AZY’s true value – the market is just asleep or stupid). These days, talk is more about the chance of a takeover being the driver. I agree. It will be a small uplift, but it's the only reason for hope of restricting your losses.

AZY will never have the money to get a mine and treatment plant up. More discoveries and a great PFS will not bring in the kind of money needed to do that. No bank would lend $300m to a penny dreadful company with a market cap of around $30m, which I think will be its value at the time of the cap raise needed to build them. By that time, fundies and punters will be so sick of throwing good money after bad that a placement (probably) and SPP (definitely) will surely be undersubscribed. After the last two cap raises, both of which saw the share price go lower, another one – or two – would see the SPP even more undersubscribed than the last one, which fell short by 33%.

Maybe AZY could get some of the money from a bank. Let's say $100m, just for the sake of round figures (by the way, all these numbers are round, because minute precision is not important when you have so many zeros). Now, think about how they'd make up the other $200m. Assuming a discounted price to attract buyers, raising $200m would require the issue of 20 billion shares at 1c. If you’re an optimist, 10 billion shares at 2c. Either way, that kind of dilution makes AZY's shares effectively worthless.

That leaves takeover as the only way. I’ll be out by then (by 30 June, hallelujah!) when I will sell my remaining shares and get this anchor off my books. That’s the only value I now place on AZY – reducing my tax bill.