Ann: 2019 Australian Nickel Conference Presentation, page-17

I agree, squash.

In addition to the market not understanding the finer smelting and processing concepts, it also doesn't understand the arbitrage advantage existing between ARL and SGQ. When it comes to analysing nickel/cobalt exploring and producing juniors, no matter how I dispassionately slice and dice ARL, SGQ, MCR, etc., so far it invariably ends up being ARL for me. An example of my slice and dice:

• ARL SOI is 112M, SGQ SOI is 368M. All other factors being equal, ARL sp should be 3.3x SGQ's (3.3 x 18c = 59c); or SGQ's sp should be 1/3.3x ARL's (48c/3.3 = 14.5c). There is a clear ARL sp under-valuation gap here. Let's call this Arbrtrage advantage 1.
• ARL owns 100% of its 773 million tonnes resources at 0.71% Ni and 0.05% Co. All other factors being equal, SGQ has to discover 133% of the same volume of resources in the highly active JV tenement to match ARL's because 25% of resource discovery goes to WES. Alternatively, ARL has only to discover 75% of SGQ's discovery volume to match SGQ's resource volume increase. Arbrtrage advantage 2.
• ARL's Godolphin ipo is valued at 20cps. At the ratio of 1:3.743 in-specie distribution to ARL sh, this is approx. 5.34cps for ARL sh. Arbitrage advantage 3.

Reminds me of that brief period of a few months of unusual arbitrage advantage existing between KDR sp and Marindi Metals sp when both were in court bitterly contesting various claims and disputes. Cluey investors bought both shares in brilliantly-calculated proportions such that whichever company wins in court, these investors are guaranteed to secure a net profit. Not saying that it is recurring in ARL vs SGQ.

BTW, whilst some posters believe that the market is always right, as though the market is a unified and coherent entity, my view is that the market is nothing more than an ever-changing net effect of the sum total of random and competing variables.There is no underlying coordinating intelligence, only underlying competitive critical mass.

All the best.