2021 Corporate action surely inevitable

As we start the New Year, OBM is within days of their first pour of gold from the refurbished Daveyhurst operation.

This is the first significant step towards de risking the operation for any potential suitors.

Nobody could really have bid for the company any earlier (after the previous owners issues) until it could be proved beyond any doubt that the plant worked efficiently and that all previous bottlenecks had been addressed.

GR Engineering knew all to well the operational issues with Eastern Goldfields and have now worked closely in step with OBM to fix everything.

The major shareholder Hawkes Point (47%) is a fund manager, not a miner, and will surely be looking for some form of strategic exit inside the next 12 months.

I think OBM (mkt cap. currently around $260 million) is very shortly going to be the best value listed gold producer in Australia (especially when the $270 million of accumulated tax losses and large untouched exploration upside is taken into account).
Please compare with SLR and RMS on production rates and market capitalisations

A good investment banker should be packaging up a sensible scheme of arrangement of scrip swaps where those 3 companies are merged together (on apples for apples, realistic and equal terms to create a beautiful gold company (~ $700 million the bank) that every indexed gold fund around the world would need to have a piece of.

David Quinlivan a leading common link to 2 companies (OBM and SLR) and the conservative culture of the 3rd (RMS) would be instep with the others.

The tax benefits in OBM could be chewed up rapidly and such a larger listed gold entity would give Hawkes Point the liquidity required to take some money off the table.

If not RMS or SLR, there will be plenty of other buyers interested.

I’m very confident of an OBM takeover in 2021 by someone, and it just may happen a bit sooner than we expect.