I'd take buy out, and wouldn't sniff at production.
Interesting article here
https://financialpost.com/commodities/mining/allana-potash-corp-agrees-to-137-million-takeover-bid-from-israel-chemicals
Allana bought out for approx $200m AUD in 2015 because of the dilution impact of finding approximately the same capex we might need with approx $10m in their kitty. That's 4x our current market cap
hell, add 10% for inflation and that's another half of our market cap!!!
They have about 20% of the resource we believe we have but high grade, maybe twice at a glance. Lehman maths suggests they have then 40% of ours. So 2.5x ours to reflect
Add the fact that this transaction was in 2015, a true lull in potash pricing. We're seeing a peak, and it's looking less like a flash in the pan
Feels like with a few more boxes being ticked here (DFS, twin holes in Project 2, etc) should see this having the potential for buyout. A good few million dollars funding needed to get there but it feels like anything under $250m (5x) would be daylight robbery, but that if the strategy is to sell in 12 months you could easily see higher (accepting capital raise and dilution of maybe 15% at a guess)
$500m / 10x is huge, but if all ducks align it really isn't silly, and this company example would show it makes some sense
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- 7.5c SP -> $1.11 SP Target (Largest Potash Deposit in West-Europe) $30M MC
7.5c SP -> $1.11 SP Target (Largest Potash Deposit in West-Europe) $30M MC, page-2134
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