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09/04/18
13:06
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Originally posted by Sharpey
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I think you're missing the big bonus which is ensuring no one else took over AMAL. That would have meant losing 50% of the project to someone with potentially ulterior motives.
Burwill, for instance, may have effectively veto'd any offtake negotiations with other parties if they owned half of the project. Either through a formal veto or just throwing up roadblocks and frustrating TAW's efforts.
With the takeover, Tawana gains certainty that the project can be progressed.
It also conveniently locks out any other takeover attempts before September, thanks to the exclusivity clause. Doesn't rule out hostile attempts, obviously, but I just don't see one getting over the line without the board recommending it.
Providing the project with some security and plenty of cash until much later in the year provides another takeover defence; expanded production and drastically expanded reserves.
I think having a reasonable estimate and publicly available measure of the resource at Bald Hill is the best defence we will get against a takeover. It is an easy thing to point to to justify asking for a lot more money. Larger production is also a bonus here.
The MD is definitely on the board and has voting power. That's why he's an MD and not a CEO (the only difference between the two as I understand it).
I don't actually see how the 51% is relevant. The AMAL shareholders aren't all going to vote as a block, and neither are the TAW shareholders, so it seems an arbitrary thing to be concerned about. As usual, I would be more concerned about the institutional vs retail split, but I don't see that having been drastically shifted by this deal.
Anyway, thems my thoughts.
Cheers.
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Your points make good sense. On a risk perspective, we have gained good control over Baldhill and Mark , being the MD, can plan and develop Baldhill without any fetters. The speed to raise production capacity is positive and this will generate higher FCF. For producing miners, FCF is the key metric to watch and is an important factor for SP valuation.