GK & team are sitting on a large pile of cash and pre-arranged debt facilities.
The $700m loan is secured on Sierra Gorda to legitimise the JV loan arrangements. A very sound structure.
So what are they planning to buy?
AAL manganese is a near certainty. Anyone want to guess what it is worth? Digestible from FCF, so the cash pile is largely unaffected.
It can also absorb the capex if Arctic and Bornite are approved. These projects would be stood up surprisingly quickly.
Sell plans for Cerro Matoso are sad. Equally, they could flip the strategy if an attractive bolt-on became available. Get big or get out. I have been rabbiting on about AAL's for-sale Ni assets. Maybe S32 is depressing AAL price expectations so it can swoop. Stranger things have happened.
S32 is hugely ambitious and working to a cunning plan in base metals.
Watch and wonder.
Ash
S32 Price at posting:
$3.44 Sentiment: Buy Disclosure: Held
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