I can imagine a handful of smart consultants poring over the key...

I can imagine a handful of smart consultants poring over the key findings of the CNB scoping study at the beginning of January, stumbling over a few obstacles and discussing possible optimisation options. The idea of a "corporate action" is born (HMX speaks of merger, CNB of corp action).

The CNB management is informed. They seek dialogue with HMX management. The way I see it, HMX is only interested in a merger (under equals) - presumably so are the top holders of HMX.

One thing is clear. HMX does not have the power to move the CNB SP down. So the selling is coming from CNB shareholders - either those who want to cut their losses, no longer believe in the story or are actually still realising profits. Of course, a larger shareholder could also be pursuing his own interests - I don't know if this is realistic given the volumes involved.

What is clear is that outside interest groups could very well move the SP of the two companies in a "desired direction" with relatively little effort. It wouldn't be the first time something like this has happened.

If the effect of joining forces with HMX is substantial in the scoping study or the result is much worse without the co-operation of HMX - then CNB is under pressure. It seems to me that the course of the SP might reflect this - it doesn't have to, but it could.

I have already drawn attention to the time-critical element. At HMX, results and drillings are pending for 3 important prospects. Yandal (lithium, gold), Mt Isa (JV Sumitomo and potential IOCG Targes) and last but not least Mt Hope South/Mascotte. Drilling is underway or completed at the end of March - results are expected from the end of March/beginning of April. If the results on the HMX side are surprising (positive), it will be more difficult for CNB to implement a merger on (possibly still) favourable terms.

CNB is completely oversold. The RSI is underground (as it was for HMX at the beginning of February). This situation may persist for a few more days - perhaps there will be a "capitulation" (i.e. a final sell-off) and we will close the gap at just under 30c. However, this cannot be sustainable - a counter-reaction will and must follow.

I maintain that HMX and CNB are in the hot phase of talks and I am curious to see "what" the outcome will be. In the end, it doesn't matter at what "market cap level" a merger takes place - it is much more important what the vision of the combined company is. This could quickly lead to a substantial re-rating and a much higher combined market cap.

It's all a question of perception. DYOR