Ann: DVP: DVP & ESS Transformational Transaction, page-79

Congratulations holders on the second TO chance, if that was your desire. Wasn;t looking pretty and management looked lost, fortunately Ellison decided to take his foot off ESS neck instead of suffocating them for a couple years before making a move. Nth Dome is an asset obviously, just not sure at what spod price or when it would stack up for development. Much better off being held outside a one-project junior with the funding sword hanging over it's head.

At the same time, this seems an odd and possibly long-arranged marriage. Billy was really starting to struggle imo. His big punt on old Cu-Zn deposits was going nowhere fast in this boom-not-boom for those metals, always one more year before taking off, squeezed by capex and cost inflation, all cum-raise in his kennel of projects. You can see the intent of the associated $50M CR by it's breakdown... only $8M towards exploration, met work, updated scoping economic studies. The bulk is going into Woodlawn, which is do or die as Sulpur Springs is definitely a boom-time project before it's time.



holders have the nice option of taking their funds elsewhere or hitching their wagon to Billy's star. DVP looks richly valued to me on a sum of the parts valuation. SS would be worth $50M MC max in this market as a standalone junior, even after spending $10M upgrading the MRE. Woodland was demonstrably worth $100m to the sellers a years ago, say it's worth twice that being outside a distressed sale and with further money invested (DVP still owes $70M of that purchase price to vendors btw). The contracting division is hard to value, again a standalone, one-contract contracting company without any assets but goodwill isn;t worth a lot. ESS assets worth $100M standalone depending on whether or not a TO premium is priced in, which it isn't any more. As an asset in diversified developer it may be worth less, until and unless exploration delivers more spod and the critical mass required to develop a mine with robust returns (personal opinion, don;t get upset. i know the SS makes money and spod prices might go a lot higher).

Point is, ESS holders are jumping form one horse to a very different one. A horse who's odds in the betting ring look way too low owing to the jockey's previous winning form, but on an entirely different track. So far Billy's ability to sell the thematic and ride his reputation has allowed him to raise large gobs of money at good prices. That is the one very real upside he brings that separates cum-raise doghouse juniors from well valued developer. How many years he can ride that reputation and the market continue to pay a reputation-premium I'm not sure.

Regardless, this was a genius move by him. Small base metal projects are dime a dozen and worth as much right now. Raising large amounts of cash for them is difficult to impossible, so the segue into red-hot lithium to buttress this and further CR's was a perfect distraction. If the ESS tenements turns up more spod pegs, happy days for DVP holders.. acquisition justified and share price moves north. If exploration fails, it's still an asset to sell back to Ellison and Mi Res Mt Marion mine to get DVPs money back years down the track. Ellison gets to cheaply warehouse Pioneer Nth for future use, or exploration adds value to stand alone status and MINs shareholding in DVP makes more than just their money back today. Billy adds lithium sizzle to his base metal dogs and keeps raising equity at higher prices than otherwise. Hat tip all around...

GLTAH