I am concerned that the recent run up in stock price is because "market insiders" have gotten hold of the news that Ganfeng will buy the entire project and FFX shareholders will be paid a special dividend from the purchase funds.
If this occurs, I can't see shareholders getting a fair price. Why? Because Ganfeng would probably offer something like a net smelter royalty, and then some cash, but not enough cash.
So the best I can see shareholders getting out of that deal is a special dividend of up to 20 cents per share, which to me, in the current (and future) Lithium market, significantly undervalues Goulamina.
Personally, I would not vote for a 100% sale of Goulamina, sweetened by a special dividend, unless the special dividend is in the range of 40 to 50 cents per share. The sale should not be based on the current value of Goulamina, but also take into account the future potential of the project. It is currently one of the largest, and top three highest grade, Lithium deposits in the world, in proximity to Europe.
The recent run-up in price has me concerned that (potential) dividend strippers have moved in, and I really hope that I wrong on this front.
All we can do, is trust in the directors to not try and soft-soap the small retail shareholders with promises of an undervalued special dividend in order to get their vote to sell 100% of Goulamina. After the BGS and Mali Lithium board history, this would be most disappointing.
I still think, the most likely reason for the trading halt is the signing of the 50/50 deal with Ganfeng, but I won't rest easy until I read the announcement next Tuesday. Will they name the company. Will they say who is going to be the managing director and CEO, and rest of the board? Will the new company run an IPO? There are lots of questions.
I have my fingers crossed for Tuesday.
Cheers,
Gw
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