I don't think this will happen as we are getting a scrip merger as set out in today's announcement if this goes ahead and is approved by shareholders. This means we will likely be getting shares like for like in the new entity. It is possible we might get a combination of cash and shares but I doubt that is the case. That would not be for the benefit of shareholder as it would trigger a range of capital gains tax implications for Tawana shareholders as we will have 'realised' our gains through receiving cash for the shares. Scrip mergers generally do not trigger those obligations.
So if all goes ahead:
- We might get like for like shares in the new merger company
- The new merged company will likely have a second DMS and a huge reserve (not just resource!) upgrade, with hopefully a tantalum offtake agreement.
- The new merged company will likely be joint listed with a $500m+ market cap, although it is possible it would just be SGX or ASX, but I think that is unlikely as it would reduce the number of investors.
- As the merger vote would occur on or about the date of the AGM, we are likely to gain shares in the new SpinCo which will explore and potentially mine Cowan and other tenements.
I remain very positive but all IMO and we should all DYOR. However, who knows!
This is not advice of any form (financial or otherwise) and we should all get independent advice if we need it.
