I think they just bought up a stake to block other companies from doing a t/o of Red? While technically this is a reverse t/o, it is one that comes at the expense of all SLR holders, it doesn't exactly seem worth it?
The way Red has positioned itself in the current market they won't be very useful until 2 years have elapsed, there are a lot of variables at play when you decide something 2 years out.
Even just in the short time frame that SLR and Red have initiated this t/o the playing field has changed A LOT.
For the BoD to decide that they want to go through with this merger I would say isn't weighing the potential risks at hand, basically why can't SLR take over Red in 2 years time after they've paid down some of their debt and cleared their hedges in a more stabilized climate?
Why exactly does SLR need to merge with Red right now? I don't see any potential benefits of doing so, even if they start builds and clear debt on Reds side they will not see benefits from that until how long? At which point does that mean that gold prices are at ???? (lower, higher?) seems like a big risk to me almost like a hedge?
I'm not sure why they're not trying to take advantage of the current climate, by working with I guess miners with unhedged positions that require more cashflow to expand operations? Instead they want to work with miners that have hedged positions?
Even if they expand operations on a hedged miner the returns are basically capped? Expanding operations on an unhedged mine is pure profit play? It just doesn't seem like a wise move for SLR to share its equity with Red, I don't see the benefits of it in the short term.
I would think that merging with Red later down the line would be more beneficial to SLR than to merge with them now, even if it means keeping a blocking stake in Red (that is if they REALLY want to merge with Red down the line and don't want other companies looking at it) [although personally I'd sell the pump and buy back in on the dump which will probably happen if SLR dumps the merger, since Reds SP is most likely being pushed up by SLRs equity] Also holding a blocking stake in Red would make SLR much more attractive to M/A.
I'm not sure why anyone would be looking at Red for a M/A in the current conditions with POG in its current state, basically the risk factor of not knowing has already been taken out? At this point why would you choose someone that has already, so to speak "lost the bet". If anyone is looking for a potential M/A would they not just look at SLR instead of Red? If both are on the table, then one would definitely be more idk shiny than the other?
