discovery takeover implications for cdu value, page-11

Couple of points on DML:

They are a producer (just started actually), They're forecast by Macquarie to produce 33k of copper and 1103koz of silver this FY, at cash costs of about $1.29/lb. They've got a resource of 165mt @ 1.26% Cu and 16.6g/t Ag across five deposits. (jorc compliant)

Someone earlier alluded to the precipitous fall in their shares in august - well part of it was to do with a cap raising, and the other part was our old friend, Graham French of M&G (also CDU's largest holder) selling down his stake in what UBS described as a 'price insensitive way' to 'make a point'.

From the AFR http://afr.com/p/opinion/intrigue_surrounds_takeover_bid_0K0qfmAuBI7kw5s06MKiPP :

"Discovery’s shares were smashed by a decision taken by global resources fund manager M&G to sell down its holding in protest over the $50 million capital raising in August.

It’s believed that UBS, now advising Discovery, bid a premium to market to snare the shares from M&G but were turned down on principle.

The shares were instead sold in a very “non-price sensitive way” and the action is believed to have knocked their value down from $1.30 to 90¢."


Clever old Frenchy! Very principled in losing other people's money. No wonder his vanguard fund is ranked in the bottom decile YTD and over 3 and 5 years! Muppet.

http://quote.morningstar.com/fund/f.aspx?t=VGPMX