A few observations
Goulamina has a NPV of US$1.2b, this deal means the project is funded and will go ahead. The US$260m valuation based on the deal will very soon be a figure from the distant past.
Reading between the lines, I’d say Ganfeng want to keep “Australia” out of the deal as much as possible, can’t see them owning 50% of “SpinCo’s” shares. I think a new (non Australian) company will be set up whereby SpinCo owns 50% & Ganfeng 50% of this new company. So this would have nothing to do with the demerger, they can get on with construction etc very quickly. A big Chinese company like Ganfeng will get on with it at a surprising pace & who knows how big they’ll make it, they certainly won’t be constrained by the DFS.
Our market cap on Friday’s close was $357m based on 45.5c share price. The price had run up from around 38c ($297m mc) a few days prior, probably on speculation re the Goulamina deal. I don’t think $250m for the gold (Morila) is too far away from what the market had valued it at. I agree, very undervalued, but that is what the market priced it at beginning of last week.
Ganfeng have apparently paid US$130m to us for 50% of Goulamina.
That values our 50% at the same US$130m and we also receive US$130m in cash making it worth US$260m to us (A$337)
Whether they are paying that for 50% or 40% doesn’t matter. Our (same) share is still worth the US$130m & have US$130m cash
We will have a capital gains liability. Our book value for Goulamina is $27.4m (p33 ann rep) we also have $21.5m capitalised drilling etc (p43 ann rep). I’m not sure if that $21.5m is included in the $27.4m figure, I’ll assume it is. We also had $36.6m of accumulated tax losses. A$168m (sale price) less 50% of the book value = $154.3m profit on sale, less the $36.6m losses = $117.7m @ 30% tax = $35m tax
So I’d think our market cap when we commence trading again should be $250 + $337m - 35m = $552m or 70c
We have still yet to see the details, sounds like the gist of the deal is as per above though.
