Aurelia Metals strikes gold with $200m M&A deal, raising, page-129

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RoyE

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05/03/21

15:19

Post #: 51554488
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Originally posted by eastwest101: ↑

You are wise to always be skeptical in the market, in order of the points you have raised:

- long time to construct the mine and Diversified Resources were a "forced seller" and thus Pybar were the "default/reluctant owner" of Dargues (i.e. Pybar were the largest creditor so it was a case of taking the mine, or taking a haircut). Pybar are a mining contractor and don't want to own and operate mines, and with Covid-19 travel restrictions disrupting all of Pybars business plans and its strength or mobilizing contractor mining workforces from areas of low wages into areas with high wages was a business model that was prone to destruction by state border restrictions. Mining industry staff and skill shortages are multiplied by state border closures and lack of options to deal with these.

- producing concentrate does introduce some potential for "shennanigans" with offtake agreements and disputes about actual grades and actual levels of deleterious/penalty elements. As long as AMI have good commercial and metallurgical people keeping an eye on things, these risks can be controlled.

- probably quite a few people sitting on the sidelines seeing how Dargues performs, nothing wrong with that if people have doubts. Certaily no shortage of people here who were thinking that AMI overpaid for Dargues and might have been better served waiting to buy it off the receivers/distressed sellers on cents to the dollar value. However AMI did send a team over to do a detailed due diligence on site so we should allow for some level of professionalism/expertise that investors didn't get to see.

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Thank you Eastwest for your informative post. You are one of the most knowledgeable and considered posters on HC and your posts add tremendous value for myself and I'm sure many others on HC.

AMI Price at posting: 35.5¢ Sentiment: None Disclosure: Not Held
5 Upvote

0 Great analysis

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