A take over theory does not explain BRZ's action to acquire more stake from MSB for nearly 100% premium. Regardless of any future event, a stock buyback entitles BRZ shareholders a greater stake of the company per share for the same amount of cash spent. One obviously gets more bang for your buck to get 0.63% than to get 0.35% for the same amount of cash.
I think the only logical explanation for this seemingly quite "foolish decision" is Bearing firmly believed in the project's potential and value it far more than 150M per Jeremy's comment "we believe current share is a significant disconnect to its potential". To acquire a higher stake in the form of stock buyback in the amount of 500K is unachievable in the absence of liquidity - it will probably push up the price more than 100% and end up costing more.
Whatever reason it is, the acquisition of additional stake by BRZ is a reassurance of how undervalued Maricunga asset is as the additional stake is clearly not for a strategic position.
LPI Price at posting:
27.5¢ Sentiment: Buy Disclosure: Held
