I have personally been suspicious of Lundin since they first came on board. In fact I blame them for some of the problems we have had in Iran although this is just circumstantial supposition on my part ie things were going smoothly until they started working there.
That aside I do expect that Lundin will aim to take us over but they won't do it before there is a clearly profitable project in place - preferably Mehdiabad for them but Sandpiper would be good enough too on early signs.
On this basis I believe they will support capital raisings - a few hundred thousand dollars or so is not much too them for the potential pickings in the future. Because I have this opinion I will personally let them and the other 2 major shareholders, RAB and Kestrel, do the heavy lifting in funding the company. This will lead to further dilution for me and also I expect the majority of small shareholders who won't participate. The plus is that should also mean cheaper buying on market allowing me to pad out if I need to and make a decent dollar when and if a takeover comes. Tactically this sort of dilution is what a company like Lundin would want - to gradually put the smaller shareholders right out of the picture. It's certainly the way this game is played.
Regarding takeover price RAB and Kestrel hold over 30% between them so an offer would need to satisfy their interests. All their shares have been purchased between 1.8 and 3 cents in placements since 2004/5 so far as I am aware. 4 cents, $36 million market cap, would be a minimum I would think for a happy agreement from those 2 and would probably see most small shareholders take it too. Given that a takeover is really only likely to happen if either project is a goer then that would be still a cheap price as both projects have the potential for very large returns.
Provisos: - assumption that global economic conditions don't dramatically worsen and put further pressure on RAB - also obvious assumptions that projects retain a positive outlook sufficient for these 3 to keep funding their holdings.
UCL Price at posting:
1.1¢ Sentiment: Buy Disclosure: Held
