I would love to receive that kind of consideration, however, as an investor it would suggest to me that RMS management were grossly incompetent and I would use the first spike in the RMS share price post merger tooffload all my shares. The current offer is extremely generous using any metric.
For those who want the equivalent of $0.20 per share, when do they expect EXU to hit that level? If RMS walked away now, the share price would be more likely to go below $0.10 than to above $0.20. I am also a little surprised, generally on HC, how shareholders (more precisely HC posters) that fall in love with a company show an extraordinary amount of forgiveness to company Directors who repeatedly make milestone promises that are never fulfilled. The last 6-8 months of EXU announcements shows a long litany of milestones that have not been met. How can a rational investor not note these anomalies between forecasts and reality?
EXU have a cash injection option to keep them going in the short term through the ALK placement. That dilution is of course “strategic” and “good” for EXU. However, a company with significant operating expertise, in a very sound financial position and with enormous operational synergies on offer is a “bad fit” for EXU shareholders.
I doubt very much that EXU will obtain funding early in 2019, I doubt that they could get away with a capital raising of under $70m at the insistence of lenders and it takes many months to achieve steady state production for any miner. Some talk about EXU producing MACE ASAP for quick cash flow. I am not a mining engineer so can someone explain how this will work? Will Mr Lawton drive in with his Ute and a shovel and $50m will appear in the bank 2 weeks later? EXU have claimed that MACE will enhance the project economics but it is not a standalone project and a standalone project needs infrastructure . The ore needs to be extracted and processed. However on HC many claim that this is immediate cash at bank although the company has never stated this to the best of my knowledge.
The biggest challenge RMS faces with this offer is the nature of the share register. I could not imagine institutional investors being foolish enough not to accept the offer on an educated risk/reward basis. Assuming that EXU do get a reasonable line of credit approved, the big CR that would be required to get the project going would be so large that I cannot in my wildest dreams see the EXU share price exceeding the RMS offer consideration. Dreams are good but they need to be balanced with a reasonable level of realism.
