Have asked my earlier post be deleted as I stated an incorrect value in the previous note... The value being paid for assuming there is 2,600,000 oz gold in resourse is actually more like $3.85/oz Au if $10m consideration is received by LCL. The $16.5/oz value was taken from an earlier post i had made about this deal when I tried to compare it to other Australian deals and used the worst case sceanrio of that analysis and discounted that value by a further 50% to determine those transactions were being sold at $16.5/oz Au resource. If this metric was used our sale price should be $42.9M and this was before the gold price rose in the last two months.....
Board of DirectorsLCL Resources
Subject: Concerns Regarding the Deal with TGC
Dear Members of the Board,
I am writing to express my concerns regarding the proposed transaction between LCL Resources and TGC. After careful analysis, it is evident that this deal is not value-accretive for shareholders.
The transaction price of $10 million, when assessed on a gold resources basis, translates to a cost of approximately $3.85 per ounce of gold based off a stted 2.6Moz Au Resource. This valuation appears inadequate compared to industry benchmarks and does not represent compelling value for LCL Resources shareholders. Given the current market environment and prevailing valuations for comparable gold assets, this deal does not appear to maximize shareholder value.As a shareholder,
I urge the board to reconsider this transaction and explore alternative strategies (which have appeared in recent days, as acknowledged by you ASX announcement today) that would better align with shareholder interests. A reassessment of the deal’s financial implications and strategic benefits is necessary to ensure LCL Resources is making prudent capital allocation decisions.
I appreciate your attention to this matter and look forward to your response.
Sincerely,
Add to My Watchlist
What is My Watchlist?
