Too many critics.Let's get serious. PSC was 21c on 30 June this...

Too many critics.

Let's get serious. PSC was 21c on 30 June this year. It is now 80c. Sam has done well.

My personal belief is he has made the right decision selling the mine outright here. He has done it at a time when lithium is flying and I dont think any buyer would have allowed PSC continuing control and development of the mine while simply providing the funds for its development.

Did you want to continue to invest in PSC with another party controlling the destiny of the mine and PSC just a minor part owner? If that was the result of the announced deal then PSC shares would be below 50c now as we would have been facing a couple of years of control uncertainty before the mine gets into production.

Also, let's give PSC time to come up with the most tax effective deal for the distribution of the sale proceeds. These are the advantages:

• They are more likely to get it right if they have more time.
• It gives us all time to decide whether it is better to buy, sell or hold.
• All things being equal, the share price will continue to rise until the distribution is made - so no rush.

Why will the shares rise?

My expectation is that the bulk of the distribution will be paid as an unfranked dividend (the market is signalling this). This will favour lower taxed PSC shareholders. This realisation when announced in the next few weeks will continue to lead to shares changing hands up until the date of the distribution from higher taxed PSC shareholders to lower taxed ones. All else being equal this should lead to a steady rise in PSC share price as shareholders adjust to the realisation of their net tax position taking money from Govt tax revenues overall.

In relation to 'black swan' events. My reading is the transaction does not need FIRB approval. Albeit there may be a possibility based on a so called 'national security' argument (very doubtful that would be used here). Had the Chinese buyer bought PSC shares rather than the asset, then foreign investment approval (on my reading of that Act) would have been needed. A Chinese buyer may not have wished to run the risk of Australian Government rejection and this may be a significant reason why the deal was done via the selling of the asset which in turn leads to the distribution of an unfranked dividend and higher marginal rate taxpayers paying some price. Overall though, in my view, PSC shareholders gain significantly from this transaction but as always you cant please everyone.