Ann: Havilah Secures Funding of up to $100M from GFG Alliance, page-127

I've made some positive posts about this deal. Not because I think its a great deal (of course I would have liked $500m cash sale for GIB) but because of a few things:

1. I believe HAV is in a distressed state financially.
-By the end of this year money will be very tight.
. -Therefore HAV's not in a good position to negotiate a great deal with anyone. No deal with any company would have looked great for HAV. HAV is desperate for funds. By the end of the year, with no real money available to spend on exploration the only possible positive going forward is the ever elusive PFS for Kalkaroo. Once again, negotiating a sale/deal with it would have HAV in the exact same position of desperate for money, so would probably not be a great deal for it either.
-If HAV had $50mil in the bank then the deal would have look vastly different. But it doesn't.

2. No partner was found for Mutooroo or Jupiter.
-They've been trying for ages to find partners. No one is interested. Or the deals that were being offered were rejected because they were too Low ball. I'd suggest that's what happened with Wanbao. Terrible offer that the BOD rejected

3. A cap raising would be needed at the end of the year/early next year.
-With nothing happening I think the share price would have kept on sliding. Cap raising would be at 10c or even 5c. At those prices a cap raising is going to dilute shares and only raise enough to keep the lights on for a bit longer.

4. All of the tenements in the world and JORC resources mean nothing if you can't progress the projects. As Clark mentioned in a recent post: 17 years and not 1 PFS. I have lost faith in the current management.

5. Ever since Portia started to turn pear shaped its just been one kick in the guts after another. The money has run out and therefore everything is going to stop. Staff will be put off, exploration is paired back, Tenements might have to be leg go of.


I really think things have gotten so bad that we were not far off being diluted into oblivion just to stay alive.

All of the above lead me to conclude that my investment in HAV was headed down the toilet. I invested in this company and have nobody to blame but myself. I have learnt a huge lesson about investing in management teams rather than resources in the ground. But i'm stuck with them unless I sell out at a huge loss. We all have that options I suppose.

Thoughts on what SIMEC brings to the table.

1. $50-100million in exchange for 50-75% take in HAV.
-We go from Approx 220mill to 550-800mill SOI depending on how much of the second $50mil is used.
-For shares to stay at the 15c they were before this announcement the market cap will have to increase from $33m to $70-100mill.


2. For that money HAV will progress GIB to full JORC, PFS and DFS.
-Mutooroo will also be progressed with Drilling, PFS and DFS. (And possibly mine development using the second $50mil not sure if that's correct.)


3. For an ASX listed company to have a DFS for GIB and a partnership/major shareholder being SIMEC is see real possible share appreciation. Well beyond the 15c that we were a week ago.

4. Because I've lost faith in the BOD and management I see real positives with having some SIMEC appointed board members.
-new board members might breathe some life back into the company, or put a rocket up them.
-It will be in the best interest of SIMEC and their board member to see HAV succeed in progressing these projects.
-The way I read the deal is that there will never be a majority of SIMEC appointed board members and so when it comes to negotiating selling the rest of the company or GIB to SIMEC they won't be able to approve a rubbish deal.

6. I think there will be more market interest/recognition for HAV now that it is in partnership with Gupta.
-With lots of activity there will be lots of announcements regarding drill results and JORC for GIB. All building a better narrative for investors to buy into.

5. Having money in the bank from this deal will mean that HAV will be in a stronger position when it comes to negotiating any deal on Kalkaroo.
-No one will be able to low ball HAV due to financial distress.
-Also, If HAV was to be able to negotiate from a position of strength a deal for Kalkaroo eg $100mil cash or more. Then suddenly they won't need to access the same level of funds from SIMEC to complete PFS, DFS's on GIB and Mutooroo.
-This could mean that share dilution is reduced and SIMEC's ownership of HAV could be reduced to 30-50% of the company.


As I said, i'm not over the moon about the deal. SIMEC will do very well out of it. But if HAV can kick some goals as we go along we may just build a narrative that the market gets excited about and save this company from the toilet. And maybe get our money back or even a little more.

Anyway,
Enough ranting from me.
Cheers
Justhavinago