down down prices is down, page-29

From proactive investors.
Some if the info is incorrect

Discovery Metals (ASX:DML) – Chinese sell 2.5% of their 16.2% stake in Discovery
• Discovery Metals’ shares have fallen again due to the sale of stock by the Chinese following the effective withdrawal of their offer for the company.
• The shares have pulled back sharply since the offer and are now significantly lower than levels reached pre the Chinese bid.
• Stock sales by funds interested in arbitrage of the offer and by the Chinese have depressed prices to levels not seen since July 2010 eg before the financing of A$151m for the mine in November/December 2010 and the Chinese bid.
• Shareholders may be concerned that the Chinese are also looking to offload their remaining 13.72% stake in the company.
• The Chinese bidders were not allowed full access to the company’s information on the mine, plant and ore bodies due to the hostile approach taken.
• The bid was seen by management and the market as opportunistically timed and as an unwelcome distraction during the commissioning process.
• Management plan to expand the scale and production of the mine and plant in short order. This should add new value to the operations and could attract a higher and more appropriately timed bid in good time.
• In the meantime the mine has suffered a couple of minor events which have served to delay the ramp up and reduce initial production through heavy rainfall and a small pit wall event.
• Discovery have published their half year numbers to end December today
• The company have A$48m in cash giving a good cushion against further commissioning issues should they arise.
Conclusion: Discovery’s shares appear to have been marked down in the market as the Chinese and M&A focussed hedge funds exit the stock. While the shares could fall further we feel they represent good longer term value for investors.