Ann: PRU: Perseus acquires 15.03% interest in Orecorp, page-50

The PRU announcement sounded like they were potentially interested in talking about a JV development, maybe 50/50, rather than a takeover, or potentially PRU acquiring 51% to 75% of the project, paying for the majority of the development, and managing the development, or something like that. PRU will want to mitigate any potential risk.

If this is the case, then ORR's response will be interesting, because I get the sense that the directors here were more interested in a 100% sale, even if it is a combination of cash and scrip.

However they cut it, for the benefit of all shareholders, ORR should talk with PRU to clarify the picture.

The problem though is the SVM agreement regarding not talking with other parties. The ORR directors will need to consider, if they break that agreement, whether SVM would come back to the table should  PRU eventually decide not to proceed, or whether some other PRU condition is too onerous.

Here is just one potential scenario. If PRU offer $150 million for 60% (or more) of the project, and agree to develop and manage the project, leaving ORR shareholders with a 40% or less stake, because the government will take it's free carried stake, what happens to the ORR price.

My sense at the moment is that the directors will continue to recommend the SVM "full" takeover, rather than a JV arrangement, so then we have to see how the vote comes in at the meeting. PRU have already declared their voting intention.

As for a reasonable value on ORR, given the current gold price, and the project is in Tanzania, then I'd say something around 75 to 80 cents might get it over the line, that is a 50% premium to the current price, or thereabouts.

This is going to get interesting, and it's always fun to speculate on what might happen.

Gw