I seriously think it pointless to keep posting whether the BOD have or have not done a good job. Nobody but a lunatic cd imagine that this deal has been satisfactory given how protracted it is. Whether that is the BOD's fault or not is now longer the issue.
Surely the key thing is what happens from here.
Irrespective of whether better deals cd have been struck in the past, is 45c a good offer now? imo, yes. I cd list scores of junior IO resource stocks - in particular those listed in the UK - that have been hammered. Down 90% & worse from the start of 2011 - in particular those with resources in Africa. Most now running out of cash & many about to go extinct. The big 3 are writing off projects & scaling back. Development of greenfield projects is off the menu. etc etc
If SDL can complete on the deal then - from where we are now - that will be a job well done.
Will it happen? I'm almost certain of that. You look at the bigger picture & I think every bit of the jigsaw is now almost in place. If the Chinese walk away now then that wd be ludicrous - a betrayal not just of SDL but in particular of their own self interest. They do need their own source of IO. An old argument but worth repeating: as per the FT yesterday:
Lack of a large-scale domestic group is source of Beijing’s irritation For all its riches, China has a problem that money cannot solve: its reliance on the world’s biggest miners to meet its resources needs.
• In spite of moderating economic growth, China still has big resources needs. Just over half the population is urbanised – compared with more than 80 per cent in Brazil. On current urban migration rates, it needs to expand existing cities and build a further 1,000 during the next decade, reckons China Confidential. As a result, steel intensity has yet to peak, so iron ore demand could almost double to 1.9bn tonnes by 2030, forecasts Raw Materials Group.
There is simply no better region in the world than the Cameroon / ROC / Gabon region. SDL is just part of the story. The railroad as most realise is a fantastic investment opportunity. How neat that China will build it & supply the steel for it. A superb money spinning utility for decades ahead. The surrounding projects, not just SDL's, are all very hi grade. Cameroon itself has huge potential in terms of its own domestic steel industry supply itself & West Africa. Steel usage in Africa is tiny at approx 25mt for the continent yet the population of West Africa as a region is over 600m & growing fast & urbanising fast. The potential to provide IO to the new steel industry in Cameroon is fantastic. There is power potential, a huge port under construction & great water resources [a real constraint on mineral developments in S America]. China has some expertise in operating in Africa.
Does anyone really imagine that China will pull the plug on this & walk away thereby massively antagonising Cameroon & ROC - & shooting itself in the foot. Surely the interest of the Koreans & the Indians in the region is additional proof that this is a fantastic opportunity.
OK, the Chinese have been a monumental pain in the backside, but come on guys - what logic is there now in this deal collapsing? If the Chinese were going to walk they wd have done it a long time ago. The arrival of POSCO at Afferro with the MOU to build a steel mill nr Kribi is a hell of a hurry up imo.
I am 99% certain that this deal or an identikit substitute will happen & most probably by the 26th term sheet deadline.
So why are the shares where they are? A lot of that is down to you guys who have almost given up posting stuff like this because you are so busy trashing your own shares. Look at the tiny volume of shares traded - only PIs are selling, dribbling the share price into the gutter.
Look at the facts & the logic - it is a lunatic theory that the Chinese won't wrap this deal up, imo
SDL Price at posting:
26.5¢ Sentiment: Buy Disclosure: Not Held
