Been a while but why not jump back on the mouse wheel, so here goes.
A JV Partner, which is what selling part of the project means, is then open to what ever the project costs are at the % invested, up to SDL if that is negotiated as just the mine or the entire deal. My view should be just the mine and should be considerable price paid based on in ground value of IO. However due to the time lag SDL has run themselves into a bad position, but never the less any JV will be up for the capital % of what ever they signed up for.
As for not having access to increased production, seriously there are some strange people it is a split all the way!!!!. Oh and by the way, as for not needing any other players in the region, as other posters stated months ago here and on LEG web site, equally that seems to be wrong also. (LEG just for Westcott, I am banking you will see a far greater tie up and you will understand why if you understand mining and shipping grades, plus pit optomisation etc, or an alternate player for the same reason)
Anyway, here was a stab in the dark that seems to have legs, unlike the volumes for the entrusted legends that have unspeakable backing for SDL Mgt and a couple of folks that seem to be able to google but not understand mining. Someone who actually has an idea might put forward this -
31/10/2010 Posted here on this SDL thread -
Blah, First para irrelevant
In regard to take over, I think there are other options here. Certainly a JV with a major player on the key asset, would be a smart move long term. The JV would inject capital on the key asset and also allow SDL to move the business forward in several aspects.
1 Secure the companies future with significant capital and also assured of the first mine seeing the light of day.
2 Allowing for significant investment into exploration to develop multiple sites within the region and hence owner operator of multiple assets that leverage of the significant infrastructure, plus a solid JV on their maiden operation.
3 Allow SDL to diversify slightly through key stakes in the Port and Rail facilities rather than trying to off load all the financial burden, to invest as much as possible, would ensure some sense of ongoing control and also revenue from other key operators into the future
4 Allow the company to explore and seek to purchase other options outside of this region, to become a global player in years to come
The opportunity now to diversify the risk through a JV with a major, with the current critical asset would ensure the company for the long haul and if the region is, as the speculators say, a huge potential upside as multiple operators are saying, then in future it could be a secondary or such asset. (I meant this first step maybe small fry in the coming years given SDL's land holdings)
I think a take over of the company would sell short the significant potential of upside on the unexplored tenements within the region. Also with a 20% stake in one holder it would factor around that holding and what were the intentions of the late principle holder, however from a Gov point of view, you have to admit they would rather BHP, RIO etc as then they have significant walk up credibility and reduced risk in expertise, financing (Cash) and proven experience.
Equity in the company in my view is a bad outcome, whilst difficult to do, if they can secure interest in the key asset and allow the company to stand alone on other opportunities and explorations leases, this gives major upside for SDL.
Just my thoughts.
Cheers
SDL Price at posting:
36.0¢ Sentiment: LT Buy Disclosure: Held
