This is supposed to be more about EXU and Tampia but I still do not get why this stuff with EM seems to be an issue with the offer here and what is good for EXU. I was one of those who disagreed about EM at the start, I thought it was too much and had been previously happy as a holder of EVN that they were looking to get rid of it.
However, RMS have made EM pay for itself making a positive return on investment, and have increased resources with it although not as much as hoped. They have mill feed for the next 9 months or was it longer, sure the AISC will be up but still making a margin they tell us. It has potential with other local acquisitions although one of those has hit a regulatory hurdle. There is nothing currently forecast to tell us EM will even lose money in FY19. Unless someone wants to imply RMS management (who have an excellent track record for reporting and guidance in the 7 years I have followed them) are criminally deceiving us on this. On top of that they have another profitable mining operation to support them if there is an issue, and $100M+ in the bank for development.
Surely if EM was such an issue they would just close it down and develop Tampia & Mace on site if it would make more money for their shareholders. They suggest that trucking is the best value for their shareholders, but they could equally adopt the feasibility study outline just as EXU would do, pay for it with existing funding and close EM. If EXU falls through they can still close EM and focus on other better development options if they are better value to shareholders. You treat EM like it is something management need to prove themselves on but they already have. They will continue to act on what provides the best financial outcome for their shareholders or else they will face litigation.
I can see no comparison with this situation and EXU which still need $100M finance to get out of the ground, have no income and significant overheads to meet in the next 12 months. I am not saying I think EXU will go bust either, just given the comparison I don't think any discussion on EM breaking RMS or RMS being desperate for help with EM as making any sense here. Especially when no one seems to be asking questions about finance for EXU, which is the sole reason why I and many others would not be investing in them at this stage. Not because finance is impossible, but because it seems the wrong time to invest in EXU while it is an unknown that will affect the price far more than proving up resources (as opposed to reserves). See their most recent announcements on Mace and feasibility for examples.
Finally I think people are oversimplifying the decisions of the big investors who have accepted the RMS offer as taking the quick buck. Maybe instead they see it as a heavily discounted entry to RMS, given the value of EXU shares before the offer was below 8c they are getting RMS shares for 24c under this offer. The last time anyone was able to do that was in Dec 2016. That is a value proposition when you maintain 25% exposure to EXU from the combined company.
Sorry @NVStrike this is not meant at you, you seem quite reasonable and open to both sides, you were just the last post I saw that discussed these issues that keep on resurfacing. I am really more interested in comments from holders on any aspect of the funding I may have missed and also about the 8% discount rate here. After the time I have spent on EXU if the offer fails I will look to plan the lowest point entry in the next 6 months so my time has not been wasted so I am a potential holder either way.
