I agree on protecting the majority (or, subsequently, at least an equal) stake. The slicing & dicing that is occurring now to suit the narrative of this new arrangement being equivalent to the previous one is frankly odd imo.
LLL holding 50% (or 45% or 40%) of the JV & mining assets is vastly superior to holding 45% (or 40.5% or 36%) regardless of Ganfeng otherwise taking a stake in Leo shares alongside you and me. I do not consider the new arrangement to be equivalent to the old arrangement at all.
It would be a bit like me being given the option to invest a few hundred grand directly into the Goulamina JV and then claiming to you that we are still effectively equals and it’s absolutely no different in terms of rights, powers, profit share & control to what I would otherwise have owned/exercised via a small holding of ASX-listed LLL shares.
Under the new arrangement Leo now owns & controls 5% less of the mine, it’s revenue, and it’s future profits than before. We are a minority partner not an equal partner, and no real control premium has been paid by the majority partner for this privilege. That the whole thing was renegotiated in the first place - and while in a suspension over DSO - reeks of Leo having had its back put to the wall here, with seemingly no option but to give up more of its prized asset which it contributed to the JV in the first place. This does not fill me with great confidence that we won’t be snookered again at the next unpredictable turn of events.
LLL Price at posting:
60.5¢ Sentiment: None Disclosure: Held
(20min delay)