lack of disclosure spells the end of lonrho? , page-6

Well LOM is back to where it started its run from a year ago, but at least has a plan for 2011 and 2012 with some encouraging bulk sample results earlier in the year. The problem is the lack of capital to fund it all and now heading into recessionary headwaters. I didn't think the Chinese would be interested anyway when announced in July, unless they were able to wrangle a significant interest really cheaply. Those who have an interest in Lynas will know about the Chinese lowball opportunistic offer for LYC in 2009, as one example of how these things can be played.

It will be interesting to see what MK says about this when the dust has settled, I suspect the lack of info recently was to do with the need maintain confidentiality while negotiations were progressing (or stalling). I'm not convinced about the question of insider knowledge and the recent sell off, most speculative stocks have been hammered recently, LOM more so with the lack of further progress on sampling and the intended JV arrangements. Not a lot of turnover today, so 1.6c may be the bottom.

Where to from here: 1.? an opportunistic take it or leave it offer from an interested Chinese mining company. 2. ?Similar offer from RIO or other. 3. ? A smaller capital raising to fund some kimberlite drilling and alluvial sampling for 2011, then with more positive news restart JV talks with a stronger hand, looks likely.

I think there is a lot more to this story than we know about at the moment and its best to look at the bigger picture if you are a long term investor, while waiting on news. That is, there will be a diamond shortage over the next several years and LOM is still perhaps the best prospect for a major kimberlite discovery internationally. The current share price doesn't reflect that.