I have read numerous postings since the Hanlong TO announcement concerning the fair valuation of SDL.
All the pedantic calucualtions with respect to tonnage, capex, JV partnership, IO prices assumptions and what prices Hanglong has bought in at or how much the sp has fallen in recent times is all crap IMO.
The intrinic value of SDL is of a strategic nature. If Communist China can obtain total ownership of SDL, they in one transaction instantly secures TOTAL CONTROL of the infrastructure plus a multi-decade long life, huge resource (potentially a stepping stone to acquire all neighbouring resources beyond SDL) IO province to satisfy a sizable % of the IO imports. Breaking free from RIO,BHP and Vale is a national security priority to the PRC !
(My point is that China is not just buying a mine here, it is buying possibly the ONE & ONLY resource left in the world that will have a real impact on it's overall reliance on imports).
Bear in mind that even the SDL tenaments themselves in Cameroon and Congo are only partially explored (scratching the surfaced as George Jones described last year).
I can tell you confidently that the ultimate offer will be substantially more then 50 cents.
To be honest, we have the Chinese by the balls but they keep bluffing us as if it is the other way around.
SDL Price at posting:
52.5¢ Sentiment: Buy Disclosure: Held
