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$1.39 mincor resources nl

Firstly, I'm glad to see that they have extended the offer into...

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kotek01

106 Posts.

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28/05/23

13:41

Post #: 68001390
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Originally posted by Fredbear2: ↑

I think the next offer will be at a lower price.

Once his bid finishes, he can't buy any further shares for at least 6 months, and then only 3% every 6 months, unless he does another takeover offer (not sure how long you have to wait before making another). Given the best and final price, it can't go over the $1.40 for at least 4 months as part of truth in takeovers.

Why do I think it will be a lower price:

1) Extent of arsenic wasn't revealed. May be this isn't such a big issue for him if he doesn't sell ore to BHP but arsenic is still an issue regardless and is value destructive (penalties / less payability).

2) Extent of production - the last quarterly was horrible. Grade at 1.9% (and has never been higher). Yes a lot of development ore but what I'd like to know is how the orebody reconciles to the Ore Reserve. Either dilution is a massive issue or grade not there. Dilution to fix goes to higher mining cost, grade not being there is pure value destruction.

3) A big drop in cash in the last quarterly - not sure too many predicting that (again, delivered no where near enough contained metal, arsenic issues aside, to generate much revenue).

4) AF is vindictive. He won't pay a higher price purely to spite those shareholders who didn't accept.

5) AF has time. He really wants the ore for the downstream JV with IGO. That is a while away (several years). If there was a higher offer, it will come after the equity raise to fund the downstream capital cost.

I think he will do a major capitalise raise (pay back debt/out of the money hedges), and I don't know why you would put more money into a company which is almost impossible to trade out of. Disclosure will be just as bad, may be worse, because AF will do absolute minimum except perhaps in the very short term - he'll want to show all the issues (marketing to downside, rather than marketing to upside).

If you've got a loss, I'd take the money and put it elsewhere and hopefully you've made enough money elsewhere to benefit from the capital loss.

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Firstly, I'm glad to see that they have extended the offer into the new financial year. I'm still not sure what I'll do, but at least I won't have to book the capital gain this year.

Whether Wyloo will potentially come back with a higher offer in a few months or not, will really depend on how much do they want to own the whole company. The fact they they have extended the offer several times, makes me think that they do want to own it all. If they were so worried about the various issues mentioned above, they could have stuck to their original schedule, and be happy with just the majority ownership.

Let's face it, AF is not trying to buy the company out of charity, and neither is he doing it to make a 10-20% return - he is looking for a multi-bagger. Now, whether he is successful or not, only time will tell.

But one thing we have to acknowledge, is that AF has done all right for himself thus far, and so I am willing to back him and stay with the company.

MCR Price at posting: $1.40 Sentiment: Hold Disclosure: Held
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