I can see why many investors moved to the glass half empty, and I always go back to the chart of a typical spec miner, the ups and downs are just part of the process. There is only one question that I need to have a yes to, and that's, 'is this company going mining'. For me ADN is a yes, and from my average price I will be in the money once this happens. As far as my investments go, until recently, this was by far my safest investment from a risk point of view and my back up for any of my other spec investments failing! I've got 3 biotech's, big risk but big reward, could lose the lot but at least I'm willing to give it a go. Just to give you an idea, I have ridden the MSB wave for the last 5-6 years and they are now just waiting on an FDA approval, which I give an 80% plus chance.
With your paragraphs below:
In terms of the standard CPs in favour of the company, my take is they are more “protective” CPs as opposed to one we can use to be “proactive” or take control.
For example I would assume they are along the lines of if we don’t achieve a positive FID by a certain date or we don’t produce the desired product by a certain date then we have a get out clause that protects us from any harm associated with breaching the terms of the agreement.
I went to the same conclusion to start with but then after listening to Bob talk I feel he is trying to give us clues but without breaking any ASX rulings. First for me was he made it clear that they want to be able to swing between, core & complimentary, if this is the case then any agreements signed will have to have some sort of get out clause/s. As you mentioned there will be standard CP's plus others added by both parties, my question then was, why would they add the FID comment to the ann., they didn't need to. Same with the Chinese agreement, why a term sheet and then an offtake agreement signed with a date of up to the 30th Sept (15/16 weeks away). Well Bob basically said that they want to have the funding, uDFS and FID done in the next 6-8 weeks, they are also expecting further BoA's to be signed. Are these BoA's better than the current negotiation's we have been advised of?
Then under the Q&A, I think it was the Scottish gentleman that asked some questions around financing and Bob saying that he doesn't want to give too much away. Bob said that they are juggling lots in the background, i.e, funding the uDFS, FID, and no doubt the best BoA's for ADN. If we take what both JM and Bob have said about companies wanting our product, they will no doubt want to be in a position to cherry pick the best ones. I got the impression that Bob would really prefer to play in Europe, both in CRM and HRM, and given China's history I would want to be able to get away from any agreements. I think the term sheet and offtake agreements are safety back-ups and Bob doesn't want to offend these companies by them knowing this (they probably also show that if these better BoA's don't come in, then they have enough BoA's/interest to get funding for 1a and perhaps 1b). As I mentioned in my last post, samples have been sent to Europe since their trip, if samples have been sent, this could take a minimum of 3-4 months for testing and signing of BoA's.
Again, all speculation and doesn't really matter as long as they go mining. We were in the money on the last DFS and Bob said that the uDFS should be better and that was just off the 30% price increase, imagine having HRM thrown in for Co2!
ADN Price at posting:
4.3¢ Sentiment: Buy Disclosure: Held
(20min delay)
