ALR altair minerals limited

In the potential scenario of an equity swap the question would...

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    In the potential scenario of an equity swap the question would be capping by whom.

    There would be a few ways to determine value of OD assets as a part of the whole but you would assume a part of this would involve agreement on a value for all CHKs non OD assets and cash.

    Cash - $10m
    Pyramid Lake
    Wee MacGregor
    Mt Gordon, Success & Mt Colbalt

    I did a quick and dirty DCF valuation on Pyramid Lake and could easily justify $20m value on this, we know Wee MacGregor is wanted by CLE and the other assets would have some value.

    So theoretically if the current MC is say $50m and $30m (or more) of that is non OD assets then the value of our 80% (as currently valued by the market) would be no more than say $20m.

    So the remaining 20% is worth say $5m equity (escrowed of course) and OD can then sit back and enjoy the ride.

    Of course if the current share price were a lot higher OD would end up with a bigger slice of the pie as the OD assets would hold a greater % value also.

    So the interesting question is capping by whom? I would potentially argue in an equity swap scenario keeping the price around current prices until the deal is done may be in the best interest of current shareholders.
    Last edited by WhatLiesBeneath29: 19/02/21
 
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