Yes, we were never given a chance to properly compare the stand alone option because SPR slow walked it, while still presenting at every opportunity about the greatness of a find so close to near new mill. It was bullshit ... we now know they have been working behind the scenes on a combined Mt. Magnet operation for some time.
We would be in a better position to understand the merger if they had gone ahead with PFS/DFS after the last resource upgrade. We all took the dilution hit at the last upgrade partly so they could do exactly that.
I feel like the "faster route to production" benefit is an artifact of SPR management slow walking the path to production. I am also not sure I believe it ... there is a good chance the scheme of arrangement will fall over and it will revert to a drawn out TO and production via RMS will also be delayed. My interpretation of the TO backstop is simpler than the Money of Mine one ... I think it is just reflects uncertainty about getting 50% of shareholders voting yes, given the low premium and high hopes many had for SPR. Occam's razor.
I call BS also on a renewed focus on exploration in RMS ... they didn't need a merger for that. And "exploration DNA" spare me ... I hope they didn't pay a consultant too much for that line.
I will be watching closely if the now lame duck SPR management keep at the drilling and discovery ... if the additional discoveries some of us were hoping for eventuate the merger terms could look unattractive come decision time. There is a disconnect between the precision of some of the commentary about the quantum of the offer and the uncertainty about what the relative company values will be at the time of the merger .... leaving aside fingers on the scales of the SP of either company to keep the comparative values.
The idea that bigger is less risky as some kind of principle is also BS. Size and risk are two different things. And everyone in an explorer developer has already made a risk / reward bet. Are we supposed to change our minds because SL has decided to exit?
As for the greatness of SL, which is the premise from which some posts develop ... significantly RMS would give him a redundant non-executive role on a bloated board. That might reflect their assessment of his expertise ... or it might be a sign that he wanted to exit on a high and that we have a combined chairman and MD who has wanted out for some time. My opinion only. It is ok to be tired and want out to do other things, especially if you are already rich ... but I wonder if there were disincentives to just walking away and handing over to someone hungry for new success (I can't be bothered checking the remuneration and incentives)?
SPR Price at posting:
$1.77 Sentiment: Hold Disclosure: Held
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