management have done an amazing job securing this type of investment under these market conditions.
this deal truly validates the exploration potential and supplements their strong team with a more technical skills and a strong balance sheet to ensure exploration is essentially fully funded for next 3 years. the structure allows for an strong alignment of interest between lundin and exisiting shareholder(particularly because they can invest more at 8c under the rights issue)
the major risk is that this deal has delayed the start of the drilling season and they run out of time before they have the opportunity to prove to lundin the upside potential. hopefully the weather gods are on our side.
I dont understand the comments above where some punters want to have 100 percent stake sale at 15c or roughly 40m aud market cap when we have a potential billion dollar resource.
just valuing this on the option value of the cash to be injected this values the company at 63m aud for their 49 percent stake in porpheries or close to 25c with upside from valuing the potential extraction of resource, and zackly/caribou dome.
yes management may have brought in big player a bit early but under the current market conditions eg trump/China trade war etc ... this is as good an outcome as one could get.
PXX Price at posting:
10.0¢ Sentiment: Buy Disclosure: Held
