The BRZ share price has taken a pounding over the past year....

The BRZ share price has taken a pounding over the past year. Interestingly, the company is unbundling its non core assets into a new listing leaving the listed vehicle holding its MSB JV stake. Effectively making BRZ ready for a “clean” transaction or merger. Until yesterday a merger was a speculative notion, however, the purchase by LPI of a 1.35% stake in the MSB JV and the addition of 2 non exec directors from MSB has greatly increased the probability of it happening.

Based on a $15m valuation for LPI’s WA hard rock assets the MSB discount valuation for BRZ is ~25%. The share is less liquid than LPI and is a minority MSB shareholder versus LPI’s majority stake, plus it has limited cash on hand. However, if a merger of all the JV partners is on the cards then BRZ is a cheap entry. Full disclosure - I don’t own any BRZ, only LPI