Ann: Transformational Combination of Ramelius & Spartan, page-184

Hey Sabine (oh how I hope the following comes close to your expectations! ), like you I feel so lucky to have such a plethora of HC posters who I respect (some I have met in person, most I have not yet) share their views on the potential transaction with their investing and life backgrounds guiding their rationale. I also want to be very clear that I feel incredibly lucky to have been able to invest in GCY/SPR and reap some incredible returns (though I am happy to say there are a few on here who have made.... what I view as incredible x 2! returns ).

I have also been lucky enough to speak to a few select friends regarding the details of the potential deal and.... well, I started to write my thoughts last night, but.... it got so late, I could barely string two sentences together, plus... in that time, so many have shared their views, which... quite honestly summarize the full suite of emotions and thoughts I have had in the past 2 days.

I guess let me first say, that HC has... changed my life (perhaps a strange way to start?), but... through it's existence, I have become a better investor, mainly because I have learned from others and best of all, made a few friends too. We are all different, we all have different motivations for why we invest in each company, even if perhaps the overall overriding goal is to make a profit (but for some it is more than that too). All of us have different risk profiles, so to speak, which change over time. I think this last point, is where most of the discussion starts to diverge, as... essentially, GCY now SPR has survived two near death experiences, then... with a new MD, became a successful explorer with a attitude of fearlessness. Which made sense, when the market had all but given up on GCY... literally. But from that and with all the exploration success, which I have stated many times, is a incredibly rare event, I would argue, NN/PP is even more rare than Hemi over at DEG (and hopefully over time, more exploration categorically proves me right). This incredible run of exploration success has been rewarded with share price success, but as @Joelstar and others point out, there is always risk (even if hopefully, it is proven groundless).

I can honestly say I took some truly stupid risks in my early years of investing (whilst I don't want to share too much personal info, I am not... the oldest on HC! ha, lets just say, I am still far enough away from retirement, that I flat out refuse to put $1 extra into my super, as I believe I can do a little better with my capital, even after all the tax benefits). With my life at a different 'stage' with children to care for, whilst my name has not changed on HC, I have.

When I got my first shares in GCY, back in the spin off from GIR... in.. gulp, March 2010! ha... only 15 years ago. Yeah.... what a ride I guess. Highs and lows... (literally and figuratively), I remember when GCY almost sold off 50% of Dalgaranga for.. I think it was $20m to a J/V... but it fell through. Ouch for them. Then you have... the Admin saga (2x). 15 years where POG flew, crashed, flew... tumbleweeds... flew. All this time has slowly, painfully taught me, that above all, capital preservation is key, especially, as... my capital has increased in size (not complaining mind you, but I can assure you that I have had some real lows, where I basically started from scratch twice... My initial parcel of shares in GCY was around 200,000 shares. Price range.. roughly from $0.08 to... $0.77.. pre-consolidation (from memory it was 10:1) I have, luckily enough, averaged down, particularly after the 'almost recap', under SL, to enable me to have a life changing paper profit for my family. Note.... paper profit.

Hmm... where was I? Oh yeah... my thoughts

I do really think SPR should get their hands on the most recent Euroz report, as.... it has some truly exciting thoughts on the upside potential of Spartan with... a bull case of $2:15 ( have to laugh at the 10% calculated upside for SPR... yet at the same time, the drill bit needs to prove this number is super conservative! will it do it before the deal is done... big question). I would share more, but that is all I have been able to glean from the wonder WWW.



Now... am I saying SPR is worth $2:15 today, not necessarily, but... what for now gives me pause, is SL and MZ have been in discussions since at least November last year (the announcement clearly states they have been in discussions for 'months').



This deal has been in the making for a long time, the question for me has always been about on what metrics. As others have pointed out, there is never a way to make all stakeholders happy, just not possible, but... there is, or there should be, in the case of a 'merger', good will shown by both parties to ensure 'fair value' is ascribed to all shareholders. Impossible to perfect, but.. not impossible to attempt. Let me be clear, I am trying to see both companies respective views... SPR... big discovery.. huge upside, RMS... over a decade of successful mining, deals, etc to build their company to where they are today.... etc.

When I first read through the presentation, it read like a script from the other takeovers RMS has made for AOP, BRB and MGV, yet... this is not a T/O, this is a merger, and... whilst this might be me just picking at nuances, it read like Mark Zepter could not quite take his ego out of the equation. Sure, we all have ego's, but, again, this is not like the other deals. This is not picking up some small cap that could not stand on it's own. Dalgaranga is the premier discovery in Western Australia (with a new plant that needs a little extra kit, not a 'refurbishment like the MoM team kept harping on about), it will, over time, undoubtedly produce more FCF than Mt Magnet or Rebecca combined, everyone knows that (though the presentation was at pains to point out that SPR has no reserves.... no mining study... nothing, almost an empty shell, yet... RMS is willing to pay up big for it, you should not be able to have your cake and eat it too.... yet I know for a fact, that the SPR team regularly run the numbers on the MRE (even weekly).... Some excellent questions have been raised on these threads... will the PFS go ahead... will SPR expand their drill program? Silence from the SPR team so far.

However, if I can push aside my bias, and just look at the numbers, which again... RMS has gone to some lengths to muddy... as it's not at all clear why I am getting paid $0.25... which is indeed the cash SPR just raised at $1.32.... It also glosses over that because RMS bought 20% of SPR at $1.... the actual total being paid is not $2.4b or whatever... we are just getting our own cash back. Which... I note RMS will likely generate again perhaps 5-6 more times in the coming 18 months (which... I will eventually share in, albeit, at a reduced rate because I was not given the option to receive only script, which was/is one of the driving reasons why I am not 100% against the deal). I am pleased about the 20% of SPR being extinguished far better outcome that what VAU/SLR did...

The presentation feels... rushed.. yet, we know they have been negotiating and discussing synergies for many months... If I can take a step back and try to chuckle about it. SL and MZ have played an incredible 'game' of brinkmanship (hat tip to both of them). They have had to carefully massage their companies' news flow to try and equalize their respective companies share prices. Why did SPR stop drilling at the end of 2024... why did RMS just release a LOM plan that.... I posted about being the exact opposite of what they have basically based their whole modus operadi on (bring forward ounces, not push them back!). It has been like a grand opera, and we have been watching on....

Why has RMS finally made it's move now...? Because SPR has not finished it's PFS... it has only just re-started drilling and RMS is in peak cashflow harvest mode. Which we will all share in. There is going to be so much more news to come, dependent upon the deal going ahead, which I admit, I am excited about, albeit, they likely won't be raised as a benefit, until RMS have control. The most obvious thing missing from the announcements, was the potential synergies regarding the stockpiles... Yet.. I guess this will benefit the merged company etc... it's a real tug of war, which in a way, does show that irrespective of which stock you hold, there are synergies, unlike many other deals that have occurred over the years.

I am in agreement with so many of the posts (and posters in this thread!) both for and against the deal and metrics, and here I sit... half on the fence, because in the end, I plan to hold my shares throughout whatever follows (generational wealth I am hoping over the longer term), and... that decision causes me to lean towards accepting all of @Joelstar excellent points and analysis on what RMS 2.0 will become, because I need to think with my head, not my heart (which still yearns to see SPR go it alone and potentially find many more NN or Peppers....) and accept that RMS has proven to be one of the best operators on the ASX. Their operational track record is... perhaps understated, when most view CMM, or EMR as the market's best performers... they have not been mining at their projects as long as RMS has at Mt Magnet.

Do I like the exact metrics of the deal, no.... do I like what the combined company will look like after the deal, yes... If RMS has offered 45/55% I can honestly say I would have just agreed to the deal, but... instead, I find myself agreeing with @BullishBearish .... and @DANNY2503..... and @sabine and @Joelstar and @Indecisive and @Baraka and @Flyingcactacus and @plough (Deflector was a real stitchup I agree mate)... I would add more names, but this post is getting long in the tooth.

I could probably write for another couple of hours! As again, the discussions above are arguably, the best I have seen since I joined HC.

The next few months will be interesting, with... my overall sentiment literally being 'Hold'.
As really, the GMD/VAU/RED saga showed me that anything is possible.