Large companies with substantial revenues and positive cash flows can ignore price fluctuations. Small companies cannot. The market is telling both COB and BPL this is not a good situation.
In theory BPL could now sell a 30% stake in the JV. However, based on the share price action the market is clearly of the view that there are no buyers for a minority stake in a developing junior with substantial capital requirements. The costs of the BFS mean the 30% holder needs to chip in around a minimum of $5m, nearly all of BPL’s market cap. If BPL needs to raise that amount it will need to issue a huge number of shares. This would completely change the nature of the business and its cash flow requirements. If the market believed BPL could execute a quick sale of the stake the share price wouldn’t be plummeting.
So what’s a constructive solution?
IMO BPL and COB need to make amends quickly and agree a settlement to extend the BFS delivery date, this is unavoidable. COB could, for example, pay BPL 10m shares. BPL would then have a liquid asset that it could sell to fund its exploration into other metals and still retain the upside of the royalty stream.
Such a settlement would work for both sets of shareholders and would stop the bleeding. It’s a win win. Currently we’re both paying heavily for the uncertainty.
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Last
27.5¢ |
Change
-0.020(6.78%) |
Mkt cap ! $135.9M |
Open | High | Low | Value | Volume |
29.5¢ | 29.5¢ | 27.5¢ | $98.48K | 340.5K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
4 | 28801 | 27.5¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
29.0¢ | 5000 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
4 | 28801 | 0.275 |
3 | 20370 | 0.270 |
1 | 29000 | 0.265 |
3 | 174897 | 0.260 |
7 | 330093 | 0.255 |
Price($) | Vol. | No. |
---|---|---|
0.290 | 5000 | 1 |
0.295 | 158037 | 8 |
0.300 | 425788 | 7 |
0.305 | 119639 | 6 |
0.310 | 157857 | 12 |
Last trade - 16.10pm 26/08/2024 (20 minute delay) ? |
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