All in opinion,
Wow. I had to update my scenarios. MIN, then FMG, then Gina.
The plot thickens. One thing I'm noting here is all accumulators are Aussies. Obviously they have interest in AGO as it's a valuable asset to any company wanting to take over
Scenario 1 - FMG win AGO.
4c has got FMG in the door. Expect bids to go up as this eventuates as FMG, Gina and MIN battle it out for AGO.
FMG has the potential to:
1. Use the extra port capacity of AGO for IO or diversify through the port with Lithium for example.
2. Use tax benefits of a potential TO of AGO
3. Use AGOs large tenements to explore Lithium or other potential resources.
4. Tap into the massive high grade Ridley resource. Just what FMG needs high grade goodness on its doorstep to compliment it's current IO product.
5. Benefit from AGOs current diversication JV income and ramp up its own diversication strategy to derisk away from low grade IO. Tap into AGOs tenements and drill drill drill.
6. Utilise AGOs existing infrastructure and workforce and it's own infrastructure to lower production costs further.
Gina to uses its leverage for a potential deal with FMG with regards with AGO.
Scenario 2 - FMG buys AGO then maybe merge with Gina and possibly MIN. Aussie major in the making dominating the Pilbura.
Pure Aussie global powerhouse in the making in my eyes. Could all great Aussie companies merge into one Aussie giant? Makes sense to me strategically. Why not also buy CTM now that Brazil are pro exploration for miners and PLS and with further potential for diversification.
Wow. Wow. Wow. Imagine the diversity. Gives me investor goose bumps thinking about it. It could make rival Global Majors rather envious of the potential masterful aquisition. Commodities index is still near decade lows compared to S&P Equities so it's highly probable as inflation rises (and it will) that commodities will rise. We have years to run into this emerging commodity resurgence and these moves on AGO is classic accumulation / takeover time in commodities. Given AGO is one of the first to be moved on, demonstrates its strategic value and its importance in the Pilbura.
Scenario 3 - MIN up the offer (significantly) to make AGO holders much happier and FMG and Gina richer in the process if they also vote yes. Now that both FMG and Gina has taken positions they could want leverage in negotiations. Good for them.
Would FMG snd Gina hold and negotiate later down the track with MIN using their AGO stake as leverage to potentially JV into a resource/asset? Still further upside for holders?
Scenario 4 - Gina ups the offer and outbids both FMG and MIN. FMG use leverage in negotiations. Good for them.
Would FMG hold and negotiate later down the track with Gina using their AGO stake as leverage to potentially JV into a resource/asset? Still further upside for holders?
Scenario 5 - Gina, FMG and MIN buy equal share in AGO and take over company and agree to split assets accordingly to gain best value for their businesses but also look after fellow Australian mining investors and AGO jobs.
Scenario 6 - Gina, FMG and MIN buy equal share in AGO but dont take over company and sit on the sidelines waiting. What if AGO increases profit in the inevitable commodity recovery? As rates and inflation rises globally and commodities rise, AGOs profits and it's diversication potential increases. Future AGO TOs would be more expensive. Basically in my eyes, the longer accumulators sit on sidelines and don't TO AGO are at risk that AGO will become much more than the market perceives it to be. Watch this space. Yes there is risk of downside but my money is on a recovery...and on AGO and it's lithium diversified potential and strategic Pilbura presence.
In Summary
Whatever eventuates, AGO is the grand prize here. Far too much opportunity with AGO, existing infrastructure and tenement diversication potential for buyers to simply let the opportunity go. Someone will win here and it will be AGO holders in the end. The question is what is AGOs true worth given the obvious interest.
Good luck all and I sincerely wish the best outcome for all companies and especially mum and dad AGO investors who stuck with AGO supporting Aussie companies.
