bhp takeover

Until BHP make a move on a project or APG BHP will not let APG disclose info as to what the true intentions of BHP is, what the projects are worth, capital costs, revenue, profit and royalties as this will give competitors valuable knowledge. This is a normal business practice to keep competitors in the dark.

The best I could get out of APG was that in negotiations they could have take two paths. The first was a motza of cash up front and a higher sp and a reasonable royalty percentage.

The second was enough cash to do what APG needs to do which is to build a fully integrated ERMS/EARS with all the bells and whistles not just for BHP but for APG to satisfy all the enquiries they have already had for TIO2, DRI etc and prove ALL the technologies work with a limited risk on scale up.

But with second option comes far less cash and a lower SP however they have indicated that the royalty figure is very very good and much higher!

In simple terms APG has sacrificed a lot of money NOW with the aim of making far more once the royalty stream flows and with the Corridoor sands project that is at least 20 years and worth somewhere between $300m and say $600M for the life of this one project and there will be many more and not just from BHP.

Lets not forget that APG would have secured a HUGE transaction with INCO if APG were more advanced and that means having the next plant built. Inco just didnt have the time and NEEDED to start the project ASAP.

BUT....I think most of what I have said above is all crapp because I still beleive that BHP will not pay APG these huge sums and leave the door open for the competitors.

APG will be swallowed up on completion of the next stage when BHP make a takeover offer.