Its a shame CC and its directors don't have to report to the stock market at every move, it would shed a lot more light on all of this but then they knew that and that is why they are still a private company. Its also why they are on here putting their two cents worth in to bag out DML and spread false rumors, shades of the Chinese group who did exactly the same thing two years ago.
The cost of 130km of pipeline that CC will have to put in just to obtain enough water to operate their mine is, alone, a huge deal. They cannot do it without the DML ground and plant and still make money and they know it, especially at the current low copper price. Nor can they operate their mine without the DML Mango NE 1 ore body. So there is level of desperation here.
Had CC been above board and honest and a bit less greedy they could used the exclusivity time (when no one else was allowed to participate in deals) to have negotiated an appropriate and decent deal that would benefit everyone including the DML share holders and had it been good enough, the DML board would have brought it forward. That didn't happen because a decent realistic offer obviously wasn't put forward.
Using the DML plant would save CC over 300 million USD in start up costs, not to mention close to 3 million in pipework for water of which there is none at Zone 5 but is abundant in the DML ground. The extra cash from processing would have helped DML during the start up of the underground. CC could have mined the DML section of the Zone 5/Mango NE 1 ore body on behalf of DML. But that would be too fair and our mates across the Pacific are almost always too greedy, look at the oil situation. In their heads... this way they get it all.
But then, post the exclusivity time, in comes another party.. one of several other interested parties and they put in an appropriate and fair offer to DML and which, clearly, was the best option for DML shareholders, the deal is brought forward as it should be. For CC all hell breaks loose because suddenly all that careful planning for the fire sale, using the DML plant, putting the plans for pipes over DML ground goes out the window. So then what do you do.. you make another plan to get what you want in whichever desperate way you can.
On the Group lenders I would guess they are in cosy, discussion with the CC directors, the purpose of that discussion would be what do you think??? Way too much co-incidence for anything else to be happening.. despite the blather. There is no doubt in my mind that they (CC) have already gone to the Group Lenders with a proposal that would be attractive for them but disastrous for the DML shareholders.
Logically its a much better financial move for the Group Lenders to support the CP deal than that of CC which had to be much lower because the company will get out of trouble with the underground operational. So why aren't they??? If any offer from CC wasn't lower there would have been a deal a long time before this latest offer don't you think? So why does it appear that the GL are supporting CC and foreclosing the same day? That little move is just too co-incidental.
Its also a good move to use interest to get into a data room and require information about your competitors and their resources, particularly if yours and theirs is part of the same one. So you express interest in a deal that doesn't really exist in order to find out exactly what is going on in terms of the resource, no doubt confirming that the grade and thickness extends into DML ground at depth and get the inside information. Doesn't mean you actually want to make a deal but its handy, isn't it, to know all about it and the finances as well, from the inside etc, especially if you aren't exposed to the stock market, that way you know exactly which buttons to press. Its also a very useful tool when you want to go into discussions with the GL.
DML were trying to close the best deal for their shareholders and the company, including its staff and its a crying shame.
In the circumstances this, the voluntary administration 30 days might give the Group Lenders a chance to think through the best, above board, option for their shareholders as well as DMLs and think twice about dealings with companies that will face all the same challenges as DML did, after all CC is copying every move that DML made on the ground in Botswana.
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