Hi Macrae
With the sort of dilution that they are looking at, there would likely be 4 billion shares on issue. They want to get the price to $1 a share.
I personally think this is doable - in this model CVI shareholders are gnats along for the ride on top of the Angolan elephants.
Just two items that could easily happen:- There is an iron ore area that the company is likely to get hold of post the clawback/merger. This has 67% Fe Hematite - not sure of the amount estimated there. Another one that was drilled by the Russians, so twinned core drilling would again be done.
- On shore oil fields. CVI will have 40% of Falcon, plus is in partnership with several other local Angolan companies. Remember that onshore was reserved for locals, however they don't have the expertise to carry out the required negotiations - as such they are keen to partner with CVI to get access to Conrad Maher, Kevin Sylvester etc to ensure that the blocks can get to production and they can see some cash from it.
- As CVI if the clawback/merger comes through will certainly be "inside the tent", any additional projects are likely to head to CVI first.
- Post merger, a name change to something like "National Angolan Resource Company" is on the cards.
Once the company is set up it will be in the interests of the "prominent Angolans" to continue to place projects into the company. Current CVI shareholders will have 12%+ of this.
So personally, if everything comes off I can certainly see a $4B company. They have $1.1 in cash, potentially 100M tons of copper at 2%+ grades, a good IO resource at 67% Fe (so can be direct shipped without processing), 2% of likely 1MMbopd - 20,000 bopd.
Looking rosy for next year - but is looking very ordinary right now because we are gnats ready to jump onto the back of the elephant - the elephant hasn't quite reached us yet.
When everything is set for final sign off expect to see insider buying start (Swiss bankers etc) - because when it is officially completed or agreed to it'll take off.
Cheers
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