GF’s pathway to full control of the mine couldn’t be any clearer imo. They can kill multiple birds with one stone, eliminating the FFX distraction once and for all (either directly or via a friendly), getting hold of that 17.6% stake in June, then lobbing a “cheap” takeover for the remaining 82.4% of Leo & it’s subsidiaries before we ever get to see a dividend. They could easily already have 2.4% waiting in the wings (to activate the 20% takeover trigger post June escrow).
Who knows but I suspect a 100% premium to the current share price range here would likely see them succeed too, especially with analysts now lurking around the $1-$1.20 sort of 12mth PT range and sentiment decidedly down. The messier & more difficult Mali looks in the interim the better for their chances too. Imo FIRB and foreign takeovers rules etc are not going to be a problem as Leo’s main business operations, assets and outputs are effectively all in Africa not Australia. There is no “national asset” considerations here, and the offtake isn’t even destined for Australia.
I imagine the Mali Govt would be cheering at this sort of manoeuvre, even more so if they get an advance/loan sweetener from a Chinese institution to help fund their extra 10% uptake, ultimately seeing them as the 20% partner in Goulamina to GF’s consolidated 80%. Once Goulamina is producing they’ll probably even have a role lined up for Simon - perhaps running that Lithium Africa outfit they’ve just launched!
Companies from the East in my experience tend to play a much longer and shrewder game than those from the West. While we are all here fixated on the day to day value of our portfolios, bemoaning the selloff, and lapping up visions of fairness and partnership and future production, they are already busy executing plans & strategic manoeuvres that have been years in the making. And by doing so securing scarce resources for their hungry customers and tidy rewards for their own shareholders, to which they owe their loyalty. Nobody here much wants to hear any of this scenario though - we are often far too close to the trading/holding/defending our corner action to step back and view this all much more simply through a corporate transactions lens.
LLL Price at posting:
49.5¢ Sentiment: None Disclosure: Held
(20min delay)