A very important box ticked if you're considering stumping up...

A very important box ticked if you're considering stumping up $150M to buy a project. Not that it was in much doubt, but like FIRB approval, any other suitor need not rush before all the risk boxes have been ticked.

Reminding holders of the alternative to an acquirer walking away is def part of the game. If holders talk themselves into believing unreasonably high valuations that ignore material time adjusted risks that doesn't help the acquirer of target company close a win-win deal. If no other bidder turns up, eventually holders must recognise that perhaps the risked valuation is lower than they think.

Here's another way to look at it from the acquiring company's perspective. Dome Nth has a capex of $295M, a big negative cashflow at the beginning of the project to be repaid over 7 years with a decent discounted profit on top. Whatever cash Tianqi or others buy ESS for is essentially additional capex for Nth Dome. Pay $150M and unlike ESS, Tianqi has $445 in negative cashflow at the beginning of the project to make a return from. Buying a project for cash is obviously very different to developing a project you already own... none of ESS long accumulated exploration costs went into the SS, the SS is flattered by assuming you own it for free.

GLTAH