stone cre debacle., page-5

Hello Jumpstart you can find the blow by blow in the FML web site.

Basically Stone had their eyes on CRE in order to gain a listing and base in Australia - and FML beat them to the punch. FML lent CRE some money and launched a take over off market at 1.18 CRE shares for 1 FML share. A share swap.

Stone bought a 10+% stake on market while this was in play blocking the complete take over. You need 90% to force a compulsory acquisition of the remaining shares. A few other holders held off - mostly offshore I understand. So FML got control of 82% approx of CRE - but not total ownership.

CRE had a very large tax loss which could be claimed if / when FML gets full control. The assets of CRE would also be used at the total discretion of FML in this case instead of having to ensure that minority CRE holders are not 'disadvantaged' by the controlling Party's (FML's) decisions on CRE direction, operations etc.

The market does not like uncertainty, this is another issue holding FML back a little at present. CRE is / was (soon) seen as a non-performer by the market which questioned the wisdom of the take over by FML in the first place. So a turn around on CRE would be highly valuable to the FML share price. To clarift this - instead of CRE seen as a negative it would turn into a positive for FML IMO.

So base value FML maybe $350 - $400M M/Cap on current FML ops (my March quarter estimate) are discounted as CRE is seen as a drain or potential drain on FML.

Turn this around and you have to consider that FML can be re-rated from $350 - $400M (-CRE) to (+CRE) of $150 - $200M = combined M/Cap of perhaps up to $600M and is currently only $210M. This is upside on a turned around CRE and completed development at FML at 100k oz stable around $900 C1 cash cost and gold up in this range of A$1600 - $1650.

This is my opinion we have to see what the market thinks in due course.

I hope that helps.
Regards,
CW
DYOR&DD