Ann: Recommended Takeover Offer of Bullseye Mining Limited, page-13

Yes, RED's offer was opportunistic but it was reasonable at the time, only around $5 million or more. At the time, I was a shareholder of RED, and was glad it didn't go through with the takeover. Bullseye looked to be problematic to me, on a number of different fronts, once I'd undertaken all the research on the company. Looking back on my notes now, I can see why I wouldn't want Bullseye. I valued it at about $8 million at the time in 2019, though you can probably say now that a fair value might be something like $20 million or so today, if we are being generous - (but certainly NOT $115 million).

However, RED did not come back in the end (probably) because of the mounting legal issues associated with Bullseye.

EMR shareholders are going to diluted, so any dividends are going to be diluted.

And EMR look to have paid quite a premium for the privilege of taking on all these Bullseye assets, and the many legal challenges, litigations, WA supreme court appearances, and plaints that come with them - good luck with those boys, it's going to be a lawyers picnic, they must be rubbing their hands together.

So it looks like EMR shareholders have paid the equivalent of about $115m for just a 2015 JORC of 226koz. HOWEVER, in reality, at the moment, it's only over 79% of those ounces, because the other 21% are the subject of court cases, and if it goes against them, then they will have to be forfeited, or bought off the new owners for an additional significant amount.

It will be interesting to see what the court decides, and there are significant legal fees involved in all of these Bulleye supreme court litigations and plaint challenges.

Bullseye also has around $5.5 million in borrowings/loans outstanding, which it is paying between 8% to 10% interest on, as far as I can read, so I expect EMR will also be taking on these payments, though the lenders do have the option to convert to shares if they want and further dilute current EMR shareholders.

And it looks like Bullseye also has convertible notes on which interest is to be paid.
The first one requires 10% interest to be paid on it.
The second and third requires 15% interest to be paid on them.
However, the persons being paid the money may opt to take it in shares, and further dilute current EMR shareholders.

Currently, it looks like Bullseye is in court with a total of 73 plaints lodged against it.
Bullseye also has a further 14 objections lodged against it, for which court action will be necessary.
Bullseye also has 3 significant legal actions in the supreme court of Western Australia against it. It looks like they are being sued for 3 lots of damages.

It will be interesting to see how EMR sorts out all these Bullseye legal issues with all those third parties, but maybe the directors of EMR have a cunning plan, so we wait with baited breath to hear it, or read of it.

Gw