Before end of cy17 SLX will have agreed to purchase the 76% of GLE. Think this will be announced sooner rather than later. Actual settlement could however take another 12 months, depending on several factors.
Good to hear it is still on track for CY2017. Look forward to seeing the actual details of the deal, as that will remove a lot of the current uncertainty surrounding the Company’s financial situation.
Several times the comment was made that the acquisition would not put pressure on the companies finances. But at the same time MG would not be drawn on price or funding. However an side to the effect that upfront cash would be very low and any other future payments contingent on milestones is a good indication I think of current thinking. Possible funding from other sources, but nothing concrete.
What I find slightly flippant about this wording (not your fault, of course) is that it does not address the possibility of settling the payment to GEH in newly-issued SLX shares; that would not technically put pressure on the Company’s finances, nor affect the cash balance, but the associated dilution would still negatively impact existing shareholders. That said, if the extent of the possible dilution is such that shareholder approval would not even be required (as I am inclined to gather from your summary, correct me if I’m wrong), then I agree that the implied acquisition price must be ridiculously low (see my scenario analysis from 03/09/2017 for reference). So, that sounds good.
Paducah is the standout short term commercialisation goal. Wilmington is now a much more secondary goal.
Noted, makes sense.
Relationship with US DOE and US political powers seems to be very strong. Seems like a lot of goodwill. US loan guarantees or other funding are in the mix for Paducah.
Ditto.
4 companies have done DD but not progressed. 2 blue chips are close to or doing DD. I get feeling that whilst SLX would have liked to announce a 3rd party deal, at end of day, GLE is more valuable to us than to another party. Also said that changing sentiment in underlying market could be very swift and that increased interest in GLE could be equally swift.
Disappointing, but I do agree with your final comment: the combination of Cameco’s recent production cuts and Abe’s recent confirmation in Japan does suddenly provide a slightly brighter backdrop for the underlying commodity. So, if we are indeed getting a bigger slice of the pie at a firesale price, that may well turn out to be a better deal for us, if for all the wrong reasons.
(20min delay)