Ann: Elemental Successfully Completes A$3.1M Shar, page-5

re: Ann: Elemental Successfully Completes A$3... Another great chess move by ELM.

Given that Dingyi were doing everything they could to counter-offer Harlequin's 34 cent offer to Pala and then Dingyi's subsequent 3.8 million share purchase on market, I would say the chances are high that Dingyi will convert.

They may not have a choice.

The billionaire is having terms dictated to him and I bet he doesn't like it :)

Personally, I hope that they do convert. We will then be free of all the onerous conditions and have $10 million at a very attractive premium to the current price. Plus it would form a very strong negotiating price with the strategic partners ELM are talking to. ie. If Harlequin paid 34 cents, Dingyi paid 34 cents, then if you want 19.9% then you have to pay at least 34 cents.....

In the announcement it states:

"It is anticipated that the introduction of a strategic partner will support the Company’s future funding requirements mitigating the need to return to market."

"and conclude negotiations with a strategic partner that will enable future development of the project.”

It is clear from these two strong statements that we are not far off doing a deal with a strategic partner. Conclude implies significant due diligence has been completed and they are at the tail end of signing a deal.

Now the two other Potash developers of significance that have both attracted Strategic Partners are Allana Potash and Western Potash with market caps of $125 million and $105 million respectively.

ELM has a current market cap of $71 million but has superior fundamentals to the above two companies.

Let's assume Dingyi convert, then we will have about 345 million shares on issue with ~$15 million cash. Dingyi will own ~13.90% of ELM.

Then if we bring in a strategic partner for a 19.9% stake of ELM at say 34 cents that would be an issue of about 85 million shares for $28.9 million. Total shares on issue would then be ~430 million shares with cash on hand of ~$44 million.

Dingyi would then be diluted down to about 11.1%. Right where we want them. Eventually, the goal will be to dilute them below 10% so that they can no longer act as a blocking stake to a future potential takeover.

ELM would have a cash backing of 10 cents.

Imo that would be a terrific result and we'd be well on our way...