Galaxy joins Alita legal proceedings, page-4

CHE/Austroid are in a spot of bother here. My take on this new but not unexpected development.

What are BaldHill assets worth in the market today? The sector turnaround with a new plant and mine ready to be brought back online with some costs - $350M is my figure when comparing at peers. (CXO $250M). Tribeca now appearing back on scene confirms this as they only have equity in Alita.

Rowsthorn/SMS/Tribeca/GXY all sharing court costs to tie this up in court and make CHE fund their legal costs by themselves.

CHE is now at risk of losing everything (being paid out) if the plaintiffs are successful. Also, remember that some of the tenements are coming out of good standing and if there is a prolonged court case timewise, part of the tenements could also be claimed by other third parties and be tied up in court.

CHE also still has to deal with the FIRB approval even if they are successful in this court case.

What are CHE options?

1. Strike a deal with the plaintiffs to remove the court case. Unlikely. Too many plaintiffs to negotiate with now. Besides, the plaintiffs have more to gain by taking it to court. More importantly - they want to own Baldhill.

2. Continue on with the court case and aim for a win. Possible, but they are now dealing with well-funded opponents with deep pockets whose legal team (Rowsthorn) has previous court experience in these types of corporate raids. Odds have now shifted and they stand to lose everything if they lose.

3. In a move to spite the plaintiffs and to minimize their loss of all assets - negotiate a deal with the administrator to swap debt for equity (with as much as FIRB allows) to help recapitalize the company and hand it back to shareholders/directors. They may walk away with a board seat and major shareholding in the company.

Interesting to see how this all plays out.