i'm in favour of the z deal

Well, I'm with the minority here and prefer the Zhongrun offer in favour of the RSG one.

RSG's headline 'Resolute further improves financing offer' I think it should have said 'Resolute extends the offer deadline' as there is little to no improvement in the offer.

3 keys points have been discussed to arguably support the RSG deal:

1. You can participate in the RSG offer and not the Z offer.

Mostly you want to participate in a capital raising to reduce dilution of your holding.... well it is more effective to buy on market at a price below the offer than it is to take up the offer at the same price - the Z deal allows you to do this.

Assuming Z proceed with the 2 tranches and the options (which they would need to do to gain control) they will pay an average price of 19.4c which is a 50% premium to the current SP.

All of us could purchase on market well below this price to reduce/avoid dilution - if that was really our concern.


2. The Z deal takes control on NMG whilst the RSG offer doesn't.

You can be sure RSG intensions are to take control of NMG however their current approach shows that they plan to do it as cheap as they can and if allowed by management will succeed with little to no premium. Their first 2 bites come in the form of 16c direct agreement with major shareholders (20% of NMG) and another large chunk depending on shareholder participation in the notes at 12c.

Z are paying 19.4c for control.


3. RSG will likely remove current management.

I'm not sure this is possible with a 20% holding - is it? RSG would not have the power for 3 years when the notes convert. On the other hand Z will and can act if performance continues to be poor.

Why we think Z will tolerate flippant spending, missed deadlines and overall poor performance is beyond me.

Z have shareholders that want to see a return on their NMG investment and Z management will be held accountable for it.


We need the money now - the longer we let RSG hold things up we risk administration - probably RSG's plan.

I hope the Z deal is passed on Wednesday for all our sakes. Plant development would be at a stand still pending dollars so every day that passes is production days lost.

Just my view - it's unfortunate it varies from most others.