No announcements from Ramelius yet today? Can't see any, so I'm...

No announcements from Ramelius yet today? Can't see any, so I'm guessing we don't yet know the terms of any deal Ramelius is offering Karora.

In one of the articles about the rumour it was indicated that Ramelius has looked at Karora before but things fell over on price. Not sure how long ago that was but if it was say a year ago then Ramelius now has a much stronger hand now than it held back then. RMS is up about 79% on a year ago while TSX:KRR is only up about 18%. It strikes me that that means that compared to a year ago Ramelius could offer Karora the same all scrip deal as they did last year and Karora would see an offer about 50% higher (or the other way it could go is that Ramelius could offer Karora in terms of price the same deal as last year but with 50% less dilution of existing RMS shareholders). I think any deal struck will be a compromise where Ramelius offers fewer RMS per KRR than they did last time but even so the price that KRR holders see is higher than they saw last time. Is my logic right? Maybe, but apologies if I have erred ...also I have not factored in exchange rate movements.



Similarly outcome if it was two years ago that Ramelius kicked the tyres on Karora though not quite as extreme as the change since 12 months ago.


I think I can see why the Karora team were keen for an ASX listing and I am sure I can see why Ramelius is taking another look at Karora given they can pick up WA gold projects at an arbitrage of as much as 50%.

Also, I've seen reference to the potential deal needing to be a merger. Yes, I agree, but only in terms of neither side getting a premium on the deal, with the transaction being based on market cap for both Ramelius and Karora. Ramelius has about twice the bulk of Karora so the wash-up should be that RMS holders end up with about two thirds of the shares. Unless the exchange rates have gone crazy since the last bid it would make sense for Ramelius to use as little cash as possible in securing the deal (as AUD is less likely to have gone up by as much as RMS has).