Exciting times ahead. Nice weekend guys and GLTA.https://rivkin.com.au/members/resources/analysis-updates/virtually-live-this-week......Kylie from Tasmania ask, this is question four. Hi Shannon. Why do you think Essential Metals is heading higher again, maybe another bit of buying? Yeah, so I, I, I released an update on this one yesterday. It has been interesting to some degree. I don't think the stock should've necessarily fallen that much after the, the deal with T L E A officially fell over, it fell over for a very specific reason.
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00:13:41
And that is of course, that a strategic buyer in mineral resources had built up a stake and blocked it. Yes, it would've been lovely to see T L E A get creative maybe, you know, offer a higher price maybe through a, you know, takeover, which it would've been conditional and only 50% acceptances. I think that would've been something that mineral resources would've act to have acted on, but it didn't happen. But anyway, in the, you know, in the short term there's no deal on the table, but what we have here is a company that is now exploring offtake agreements that it effectively put on hold while it was pursuing that, that takeover with T L E A. And now at least in the short term, based on what the CEOs said, these talks are progressing quickly.
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00:14:25
Buyers are, you know, apparently, you know, feeling a sense of urgency that just wasn't there six months ago and now this, you know, strategic investor in mineral resources with a near 20% stake, they had a stake that could block an acquisition of ess, but they certainly won't be able to block an offtake agreement, for example. So, you know, if ultimately essential metals finds a, you know, a buyer of its, of its product and mineral resources, you know, is still a 19.5% stakeholder and hasn't done anything else, I almost wonder why they, they got into the situation at all at that point. You'd think that the only reason was to block TLE from buying it.
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00:15:08
But again, it's such a small asset, it's hard to see that being the, the motivation. So my gut feeling is that they're gonna get into talks with essential metals. Again, it could be a, you know, as I said it could be a simple offtake agreement, but you know, the, I should say essential metals made the point that any offtake agreement with mineral resources given its conflict as a obviously major shareholder would probably need shareholders agreement, shareholder support, whereas a deal with someone else may not. A joint venture is another option. Or of course the, the cleanest and best option I think for us would be mineral resources simply coming out with a new bid for, for essential metals.
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00:15:48
So that's why the stock's moving. You know, I said when the deal fell over, that timing of min resource making move was what was gonna be a frustration for us. But I think how quickly essential metals is moving on on these offtake discussions means that, you know, we might see a, a resolution here quicker than what may have been, you know, the worst case outcome. So it's, it's exciting even though, as I said, we don't have a deal on the table now, so we don't have kind of that, that price to, you know, that we can be confident or be a worst case scenario, but we're in here as a high risk investor, that was the classification of the, of the buy-in on that basis. I'm, I'm happy holding it, the 48 and a half cent's at now, which is actually even back to a small gain on our entry price.
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00:16:32
So thngs are moving in the right direction.
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