re: Ann: Proposed Merger with Silver Lake Res...
"Silver Lake will make a $1.3 million secured convertible note facility available to Phillips River, to allow the company to continue exploration work until May, when the deal is expected to close."
How generous of SLR to offer and how dumb of the PRH directors to accept! Don't tell me that there were not less encumbered ways for interim working capital.
Can you imagine if the continuing exploration work at Kundip had some good hits (and there are some excellent targets) that we would see any announcements before the big vote.
There is a lot to play out yet and as I suggested before the two miners (Mincor and Indepencence (ex Jabiru's holding)) may want a say in this. Their entry levels as "cornerstone investors" were I think four fold higher than the offer price. Jabiru was potentially at one stage prepared to be an underwriter for the development of Philips River.
One might ask the question of current management why they abadoned some very good and supportive relationships established by previous management that could have possibly secured a future for Philips River early last year after the release of the DFS (and the "release" of Steve Norregaard and Andy Czerw). How the current management could not secure a copper offtake agreement is beyond belief and one would have thought the banks would have been far more favourable towards the simpler mining / lower cost Polymetalic deposit at Trilogy anyway.
I think there is a chance the deal may get through in the long term as we will all be glad to see the end of the current management but I doubt wheather the current offer will have the numbers. The downside risk of the current offer is that Silverlake is at all time highs (or very close) and PRH was down at all time lows. Knowing that these deals take many months to put together (what were the respective share prices at the time of the initial approach - could have been SLR less than $3 and PRH around 40 cents). So there is plenty of downside risk on this offer for PRH shareholders with PRH undervalued and SLR at the top of it's valuation. I agree SLR have done very well but I would expect even the most optomistic SLR share holders are happy to agree that a "ten bagger" return is as good as it gets currently.
Granted it is the best time for SLR to buy in but the absolute worse time for us to sell.
PRH Price at posting:
2.5¢ Sentiment: Hold Disclosure: Held
