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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29.0¢ |
Change
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Mkt cap ! $143.3M |
Open | High | Low | Value | Volume |
29.5¢ | 29.5¢ | 28.5¢ | $129.2K | 447.4K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
6 | 115871 | 28.0¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
29.0¢ | 59337 | 2 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
6 | 115871 | 0.280 |
5 | 99000 | 0.275 |
5 | 77959 | 0.270 |
5 | 203550 | 0.265 |
4 | 183675 | 0.260 |
Price($) | Vol. | No. |
---|---|---|
0.290 | 59337 | 2 |
0.295 | 50000 | 1 |
0.300 | 218625 | 3 |
0.310 | 1636 | 1 |
0.315 | 33922 | 3 |
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