well if this is DML who canceled the deal, i am sure we would hear about the $1 million break fee. i doubt we will find out the real reason Montsant decided to allow the deal to lapse.
Happy Hippy's Theory does make a lot of sense and makes a welcoming read, i do hope that this is exactly whats going to happen.
If i was the lender i would reprofile/refinance the deal (i acknowledge that i am biased).
The Montsant deal involves them taking a 50% haircut. Its a bad decision in my opinion. After going through the difficult ramp-up phase and then prolonged suffering only to give it away at a 50% discount would hurt. Especially at the moment, when DML appears to see the light at the end of the long tunnel with momentum building.
If they are willing to take the haircut, to simply refinance the deal and then to offer an additional 30 or 35 million loan to allow DML to develop zeta underground, payoff sedgman, complete upgrades, working capital and some more drilling makes a lot more sense.
This would allow DMl breathing space to do what it needs to do. It would also allow us to start a hedging program which has worked so well for us previously especially when the POC and POS is improving.
they should then get DML to conduct a separate capital raising to pour some equity into the deal to reduce their exposure and maybe get 2-3 million as payment to secure the refinance.
all just my opinion/speculations of course.
Apple's suggestion to have a look at Panaust makes for a great read. I think it is the comeback story that someone has previously asked for.
GLTA
DML Price at posting:
2.8¢ Sentiment: None Disclosure: Held
