In my view the potential at Andover, as Tony has stated, to be a world class resource is ‘enormous’ and not just 100mt but over potentially 200mt even 300mt. Even if SQM or RIO were to pay triple the current AZS SP, Creasy and other top 20 shareholders would be potentially giving up very big upside in Andover in accepting cash or shares particularly in RIO, where Andover would be a pimple on an elephant and less so if it was SQM.
When Sirius was sold to IGO, mainly for shares, IGO was a lot smaller and Creasy and other Sirius shareholders were still receiving enormous upside from the Nova discovery as IGO share holds - Sirius was sold for $1.8b and pro-forma MC of combined IGO entity was $2.7b!
Remember PLS is valued at $15b with a resource of 300mt and when they finish their expansion from 580,000t to 1mt production I doubt the share price will stay at the current levels ie it will be a lot higher. If Tony and other directors really believe the potential is 200mt to 300mt they would want not double the current SP but maybe 5-10 times the current SP - would a buyer really pay that much in the next 6 months without an MRE of that size?
On top of all this, most T/Os or asset sales involve a discount on the in ground value estimate, based on the cost of mine development, extraction etc. (Usually around 30-34%?)
What incentive does Tony and AZS Board have to even give up this discount when their costs are already so low? - location close to port - SQM processing - electricity, roads etc - started drilling for water
All these combine to make a compelling case for holding out for full maturity and realisation of the resource. I personally get a bit fed up with great assets being sold for less than maturity in the cash and grab mentality.
