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20.0¢ firefinch limited

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WoodySpoon

9,586 Posts.

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28/08/22

18:41

Post #: 63369739
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Originally posted by Karl89: ↑

While I have always been a big fan of WAF, i think they currently have their hands full with works to be done at Kiaka.

i would think a company like Perseus is much more likely to throw their hat in…

Though I through this back to those thinking we would have some sort of fire sale, Perseus bought out Orca… a gold company in Sudan that was near shovel ready with all permits In Place, however work to do and construction of their plant not starting till June 2023 with a 24 month construction and commission timeline….

There are similarities between the actual block 14 deposit and Morila with perhaps block 14 a leg in front base only on pit grade/oz however a true comparison would not be fair until we have the Morila resource upgrade. (Note orca had some other tenements as well that were hardly explored)

The company was bought (including the 15% shares they already owned) for around US$165m which was from memory around 65% premium on Orcas sp.

So us$165m bought them a company that had a key project that was not due for first production till ATLEAST June 2025 which still requires SIGNIFICANT funding to build an entire plant… I’m unsure of what they planned in terms of costs to do with the plant, however if they want anything close to a Morila size plant, it’s fair to say a build cost of us$250m will have to be invested with these post Covid global inflation prices… With a total price tag totaling well over +us$400m and a approx 3 year timeline infront of them, it’s yet another example of what it would cost to purchase FFX outright… and that’s before you through in the ever increasing valuation of its LLL holding….

Re the take over, while Perseus was able to buy our orca for us$165m, the only way I see it working would be a merger of the two companies with firefinch being absorbed. Both companies have give or take 1.2b shares on the register … however PRU currently has a ex valuation of over $2.2b. What ratio would get the merger done is anyone’s guess at the moment however the LLL shares should see an ever increasing evaluation even in the short term… Or could be sold straight away for an instant cash injection.

scale wise, Morila correctly once ramped up, would sit in 2nd place behind Yaoure however in front of Perseus other two sites.

Morila would be instantly producing from day one with a very achievable amount of capital to get it over the line. Once the transaction would be finalised, Morila should be pushing out fairly respectable numbers. Again Not forgetting the LLL shares in the background.

it works however I still don’t think their current main goal here is to be taken over. I’d have no issue holding PRU again, though I think if there were to be an offer put out, there would be multiple offers if the evaluation is set too low. The LLL shares make a take over a very unique proposition.

Expand

Zero chance we get value in a full take over as the LLL shareholding would be treated at book value, not the value it will be in say 20 months of $2. On that alone I’d rather a project sale of some kind, via scrip for further upside preferably. Only way to salvage upside on both projects from the FFX side of things IMHO.

Even if we did salvage this ourselves to profitability the market’s not gonna trust the company in terms of SP appreciation I don’t think. Asx investors flat out hate the location, and our rep is pure trash too. Especially if the plan is still never to pay a dividend and just look to turn the mine into another in time. No dividends, no capital appreciation was a brilliant plan from Cowden & Anderson…

Anyways another long wait to see what they come up with, Will be torturous big we get no mining update ITMT…

FFX Price at posting: 20.0¢ Sentiment: None Disclosure: Held
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