One thing is clear to me - these guys move cautiously. Some...

One thing is clear to me - these guys move cautiously. Some (including me) may consider progress to be painfully slow, but imo better a cautious approach when entering a new business outside your own field of expertise than an aggressive one.

Re-reading the dairy project section of the executive director's review of operations in the annual report makes for interesting reading in light of yesterday's announcement - which I had a look over again this morning to get a fresh sense of where they have been heading.

The 1st thing that is clear to me is that whatever the acquisition, it is related to their dairy project aspirations. They have been deliberating on this for a long time and the language in the report is still firmly focused on a dairy business.

At the time of the report, they were "primarily focussed on one site" and "conducting the next stage of feasibility" (on this site).

They also stated "an offtake agreement will not be finalised until a site has been selected by the company", and "the development of a selected site will not occur until an off-take agreement is finalised". Now these seem like a chicken and egg situation to me, but then they say "By that we mean that we intend to know where our product is going to be sold and the price it will be sold for, before we commit resources to develop infrastructure."

The last paragraph though outlines the process they intend to undertake including a BFS by the end of 2017 and the "outline of project timeframes will be made public once a decision has been made as to committing resources to the next stage as outlined above."

Imo what this all means is they have made up their mind on that site they were primarily focused on. Given the types of DD they mention in preparing their BFS I suspect it may not be a working dairy farm, and the BFS is intended to justify the acquisition and development once the DD and BFS are complete. Therefore I suspect the acquisition is probably a an option to buy a suitable non operational dairy farm site subject to the results of the BFS - remember these guys move slowly/cautiously - which will get developed next year assuming the BFS is positive.

I could be wrong about all of the above, which is just putting 2 & 2 together based on what they themselves have told us.

Cheers, Sharks