'It is anticipated that the completion of the scoping study will align closely with the end of the current exclusivity arrangement...'
That's next Tuesday! No mention of any extension.
Last Thursday (17/4/19 GMT),'the GFG Alliance announced its intention to integrate most of its Liberty steel, engineering and mining businesses into a single global entity,spanning assets across the UK, Europe and Australia... with a steelmaking target of 20 Mtpa ...'
To make such an announcement, it's expected GFG has a certain degree of confidence that it has the iron ore to meet such an ambitious target.
On Friday (18/4/19), Mr Gupta tells the AFR:"This combination will form a global champion, with fully integrated capabilities, shipping iron ore and coking coal and semi-finished product from Australia to its manufacturing plants and mills globally".
Mr Gupta has signaled an intention to ship iron ore from Australia to GFG's plants and mills globally. This suggests there will be surplus iron ore to the needs of his Australian operations.
In late 2018, Jay Hambro, GFG's Chief Investment Officer, spoke of owning the supply chain: mining, blast furnace, and port operation.
All this leads me to SPECULATE 1) HAV’s Fe assets are substantial and commercial; and 2) a deal is imminent.
My concern remains any deal could fall well short of Fair Value, which may explain the Market's lacklustre response to this ASX release.
Even at 10 Mtpa, an NPV of > A$1 billion is derived. As a guide, the base case NPV of CAP’s Hawsons project is US$867M.Among other advantages, HAV’s capex is expected to be lower than CAP’s.Nonetheless, HAV leadership’s track record over the past 1-2 years makes it difficult to predict what deal they will negotiate for HAV Shareholders.
FWIW a TO of HAV, with multiple bidders, IMO would to some extent allay concerns of a lack of transparency and confidence in the current leadership.
A TO or an Independent Expert’s Report are the only way Shareholders will know if any deal consideration represents Fair Value.
Presumably we'll know more by or around next Tuesday.
Finally, are we to assume that the Market is now fully informed or is there more information that has not been shared with the Market?
We know HAV’s leadership reads HotCopper. They should remember they work for HAV Shareholders not GFG/ SIMEC/ Liberty/ Gupta.
DYOR
(20min delay)