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10/01/23

16:53

Post #: 65621020
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Originally posted by Koala1959 ↑

Been contemplating the offer overnight - as I posted earlier 50c is in my opinion underdone.

What worries me is exactly why the Board have recommended it when looking at the environment for Lithium, some of the MCs around and ESS's SP trend since the start of 2022, an offer of around 50c to me is very opportunistic.

There could be any number of reasons including:

(1) Are they concerned with some future aspect which will impact future value (if so the DD will probably uncover this anyway) so that is unlikely to be an issue unless that is factored into the price they have accepted
(2) Do they think they can start a bidding war? I would be surprised but certainly hope that is possible - Mineral Resources would seem to be a possible candidate.
(3) Are they concerned about ESS's ability to actually fund the development of the resource?
(4) Do IGO/T expect the 50c to get rejected by Shareholders or another offer will be forthcoming and so strategically are keeping their "powder dry" to be in a position to increase the offer if necessary.

I appreciate that perspectives concerning the 50c offer will vary depending on average cost - I am at the lower end so 50c still represents a very good return for me though I fully appreciate from some of the posts a sale at 50c will create losses for many shareholders.

It seems to me we now have a Board and Management who are not as committed to developing the resource as I thought which opens up another "can of worms" if that is the case.

Are the Board concerned about their ability to get ESS to a position where they can exploit the site to achieve a consistent SP over 50c.?

As shareholders we just have to sit back and await developments. My expectation will be that the Independent report will come in around the offer amount as the project is not sufficiently advanced to definitively give a valuation and the report writer will be conservative - even though I believe there is great future potential for the resource the valuation is going to be based much more on what is actually known/provable now. The question is what will happen to the SP if this deal does not go ahead - is the price going to be stuck sub 50c - sub 40c for the foreseeable future with a Board that is possibly not fully committed to developing the resource given their endorsement of the offer.

I would start to be supportive of anything around 60c and definitely at 70c given I see a lot more uncertainties than I did before yesterday.

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if you like, Tell them to look at the mirror, then reject the offer. Keep digging if they’re incapable of developing it. Are they that very old that they’ve run out of drive and energy to explore? (It’s done by contractors, they don’t lift a finger.) every million tonnage added to the resource will be worth a lot of money in a just a few years

all imo

ESS Price at posting: 48.5¢ Sentiment: None Disclosure: Not Held
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if you like, Tell them to look at the mirror, then reject the...

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