Same deal in my viewm, only now the "commodity basket" gets bigger (and more capable), increasing CVI's capacity to achieve maximum dollar.
In Pensador (read CVI), we can finally see the path to our future in turning the Angolan's...and indeed other cash backers...into CVI shareholders.
This has always been Smyth's goal as far as I can see, the obvious upside being anything they want for themselves, we end up with.
If CVI can somehow get their stock to a 10:1 ratio (CVI=$2 at current Pensador prices), then after the claw-back, CVI will end up with about 1.2b shares on issue, Pensador as a subsidiary...and a market cap of something like $2.4 billion dollars.
To do this today, CVI would need a market cap of just over $1b dollars...this is not going to happen purely on current assets, namely their Fortitude holding, 10% profits from the Canzar deal and indeed access to Cameroon via PEA...although they will go a fair way towards it, especially with CDB and Catabola effectively free carried to production.
Personally I am expecting something left of field from CVI, if not a Niger delta position, then something equally value adding (perhaps an IO or indeed Phosphate interest?), potentially backed directly into Fortitude for further Fortitude shares...or indeed, something CVI can self-fund to value add, even if via limited placements at higher prices.
To date, the process has been relatively flawless...well as much as can be expected in such a liquid environment...as such I would not be surprise if the next part of the process did not include an equally strategically sophisticated component.
Need to get the value...and the price...up!
Not a stretch when you have $1.1b cash at your disposal, especially given the calibre of those with their hands on this little honey pot, but the really big value add will be those things persuaded that do not equally increase Pensador's value.
Cheers!
CVI Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
