All good Peppie, I agree, except, as above, I am not against a deal if it makes sense and... after many lengthy discussions with a friend, surely most investors can see that unlike many deals that occur, there are real potential synergies between SPR and RMS (substantial ones IMHO).
i.e.... SLR and RED - there were zero synergies... nadda, zip none. SPR/RMS.... very different. Anyway....
I will say that after further reading and hearing others thoughts, RMS announcements are.... based on real mining costs compared to... ah some in the market that paint a very rosy picture. That is the sort of professionalism that is perhaps ignored, or... skipped over (I can admit to do it at times).
@Baraka - did you mean 3 years? Not sure what could go wrong in that time, as the Rebecca/Roe assets have reserves. As for cash required, whilst I agree, RMS are going to need a lot, well... over the next 6 quarters, RMS may bank close to $1 billion AUD. More than enough... with current assets close to $850 million already. From what I have seen to date, RMS has on balance, been incredibly successful in their acquisitions. So I think they are about as good as it gets at undertaking due diligence (I would almost argue they have been too hesitant in more recent times).
I do agree with you about SPR needing to get it right. I find it interesting to see how impatient some are, yet also wanting SPR to be a Tier 1 company. Both cannot be achieved in a very short period of time. IMHO, the PFS to come, will be at the highest level possible, arguably many parts will be at a DFS level (that is speculation on my part). I think... RMS are waiting for the PFS, as if I can use the poker analogy, they have shown their hand... now it's SPRs turn. In the short term, RMS is potentially banking close to $2-3m per day.... yes, per day. This quarter I believe, will see them net over $200m.
To be clear, my holdings for SPR/RMS are approx 90/10%, so... I am still biased towards SPR.
Great post
@calmbeforestorm - Very much agree, both stocks are undervalued.
Although I disagree about RMS holders (well... the insto's, not retail) not being willing to be diluted by perhaps 50% to acquire SPR. In very simplistic terms... (I do not think this will happen until after the PFS), RMS could... offer 1:1. 50% premium. Perhaps with a cash component to sweeten it after the initial offer. By year's end, RMS will have approx 2m ounces in reserves, with SPR perhaps having a similar number. RMS will have perhaps $1.3-1.4b in liquid assets, with SPR having perhaps $150m. Production profile from FY27 would be around 350k p.a, at an AISC of less than $1500, with FY28 jumping to 440k+ at an AISC of perhaps $2000. What would a long life producer like that be worth? Then... there are all sorts of ideas that pop into my head, like... you have the potential for... early mining at Never Never and Pepper to send some dirt to Mt Magnet... that would quickly change production profile above (let alone all the synergies I have discussed in other posts, tax savings of $100m a year is just the start).
As always... everything is pure speculation and I am not saying I want a takeover. I guess I don't, but whilst I am about as invested as one can be in a single stock (both capital and time), I am here to make a return to support my family.
(20min delay)