Bye Bye .. toad' offer., page-58

@travted2000

It is all a moot point now but here you go...

It was complex to try and cater for all the variables but essentially used the full value of PIOP for iron ore (both as DSO and blended processed at the proposed Balla Balla complex) and an estimate only for the on-market valuation of Canegrass for Vanadium (potentially processed at Canegrass at the now defunct Vanadium plant) and trucked to Balla Balla complex for export as a finished and refined raw product and this approach also took the PIOP mine life out to at least a 26.5 year period rather than the truncated 11.5 year mine life TIO had used in their model.

What it did not include was: (a) future capital funding for development to achieve a working facility across Balla Balla, PIOP and Canegrass as that would have been part of something else and I suspected, and still do, that Shandong would be party to funding the capital works. (b) the value of iron ore as that was largely irrelevant given the timeframes between concept and production and secondly I suspect the iron ore buy price was tied in to the Shandong off-take agreement.

The values took into consideration a mix of tax-free capital return to shareholders, on-market price and the full cost of the TIO offer for PIOP and the recycling of the TIO's own capital return to maintain a full value for non-TIO shareholders but ensuring TIO did not breach their own arbitrary upper limit of $105m to get control of PIOP. The net result was it had a value for non-TIO FMS shareholders of about 22.5 cents and you got to retain your shares in FMS for the possible royalty beyond that, which was an improvement on the offer at the time.

FMSU provided a useful purpose of getting the PIOP offer blocked at the time which meant Todd wanted to revisit the alternative proposal post its deadline of 31st December 2015 but didn't for reasons of politics and ego's back at TIO/FMS/FMSU were sorely bent out of shape. FMSU then missed (or chose not to pursue) the board spill opportunity in the 1st and 2nd quarter of 2016.

We walked away from the whole affair about mid-late January and I still watch to see where FMS goes and personally I would like to see it actually go into production but the "how" is what is grinding everyone up.

Good luck and my view is still hold as there is more yet to come.