Ann: Li - Au Drill Program Commences at Yandal Project, page-20

Over the last few days, I've had a few more thoughts, which I'm happy to share here.

Of course, my heart beats for HMX - but that doesn't stop me from taking a rational view of the situation.

In fact, there are probably 3 options (or maybe even more): merger, takeover, sale of a tenement to CNB.

Each option has its pros and cons.

Of course, the content of the discussions is confidential and cannot be shared, but I am pretty sure that HMX and CNB have already sought feedback from at least the top 10 on possible options. By that I mean that they have probably asked what these top shareholders could and could not imagine.
This does not mean that these shareholders have been offered possible options to choose from. Absolutely not!
Looking at the share register, I see that at HMX 6% of the shares are held by directors, 46% by the top 20 - that's 52%. At CNB, the board holds 12.3% and the top 20 36.2% of the shares. Then there is another 4% held by OZ. So that's 52.5%. In practice, this means that the main shareholders on both sides could wave a deal through.



It is therefore not entirely unimportant to sound out "what" the main shareholders would not support under any circumstances.

On the positive side, the board and management on both sides have skin in the game. This means that, in addition to the interests of all shareholders, they also represent their own interests. I think that's a very good "starting position"

A deal could actually end up being in the interests of all parties involved.

Time factor: CNB wanted to deliver a scoping study in Q1. I think it makes a big difference whether you "calculate" this with or without an HMX contribution (in whatever form). HMX, on the other hand, is running out of money - a CR will probably be announced by the middle of the year at the latest.

The ongoing drillings in Yandal will probably show first results at the end of March, beginning of April (lithium and gold can only be " analysed" in the laboratory - so no XRF possible). The drillings in March could then have a greater impact - namely Shadow South (IOCG potential) and South Hope/Mascotte (close to the CNB mining lease) - but results are probably not expected before the end of April.

In principle, Q1 also ends for CNB at the end of March. In terms of timing, it is therefore not entirely irrelevant what comes out of these HMX drillings. Depending on the outcome, this may move HMX into a "different" negotiating position - in which case a merger may make even more sense - simply under a different starting position than is currently the case.

I have to admit, this must be very interesting but I'm glad I don't have to be part of the discussions.

Well, I think the HMX SP should stabilise in a range of 4-5c. Although I personally think that at 4 or below a buy could be worth considering (that's why I'm changing my sentiment back to buy). A double bottom at around 3.5c is imaginable - but actually illogical in view of the initial situation. The market reaction around 2 weeks ago showed that it can go up very quickly (see chart below). I do not see any reason why one should sell now.

In the case of CNB, the 55c should definitely hold. The chart shows why this is important.

The next few weeks will be interesting for HMX and CNB. The drilling results and the possible decisions that are made will have a significant impact on the further development of the two companies.

I am betting on a win-win outcome. DYOR