I for one am not keen on this deal but the announcement is good in my opinion.
Issuing more shares to grant another Chinese party a full 12% of the company for only $14 million when we are supposedly funded through to FID seems a poor deal, but it does provide a commitment to agree and execute a binding offtake agreement. All things considered this is not ideal but it's better than nothing at all.
Fortunately the deal is contingent on (among other things) obtaining shareholder approval within 84 days. So we have until late January (11/11/2019 + 84 days = 2/02/2020 but let's not leave things until the last minute) to find alternatives and stop this happening. I for one will oppose this until mid January at the earliest.
Although I dislike this deal and will not support it for now, it is a lifeline. We are on a dangerous climb and while not yet exhausted we have gone far enough that we cannot afford to fall without some form of anchor to the cliff face. It's a good thing we now have something to secure our position just in case we don't make it to our goal. Remember, we are not yet committed to a bad deal. We can find something else and reject this.
In my opinion the announcement is good (despite the deal being bad) because it puts something on the table from a new interested party right on the eve of the 2019 Precious Metals Summit Zurich where our part time leader appears to be scheduled for some sort of presentation (
41346687 -
see agenda).
If you've ever fed birds you'll know that the first one to eat is fairly reluctant. You have to put out a great offer before the first bird takes a nibble. But once that happens, other birds previously watching grow bolder and if the food is good you soon have a flock squabbling with each other to eat out of your hand.
My hope is that this bad deal we can still reject ultimately leads to good deals we can accept.
