I believe the Li potential for BRB is worthy of a separate thread at this time as I shall briefly explain. In the May 5th presentation there was no mention of Manna Li outcropping at Bombora, however there was in the May 25th 121 Mining London presentation. The wording on slide 19 was; "Steps underway to unlock value for shareholders without affecting gold focus". This helps us speculate on the timing of such a move.
NOTE: They do not want to distract from the Bombora gold field project and current deposit which is expanding. They have already indicated the initial gold deposit will be a mine; getting "bigger and better". BRB is trading at a deep value discount at present IMO (DYOR).
From the 25th May presentation we can assume the "steps" were in motion ahead of preparation of this presentation so these reported steps must have been underway by circa mid-May at the latest. That is now over two months ago. How does a company "unlock value" without affecting core focus? The answer is pretty obvious as it is tried and tested in the market for stranded assets which are not valued for a company in the share price. The answer is an IPO as was done, for instance, by MetalsX when they spun off their gold operations. It was very effective.
An IPO is the obvious way to handle this situation, to create value, as money raised in an IPO would exist the separate company structure to drill out this outcropping Li deposit over at least 700m. The outcropping actually pops up above surface over a much wider area and initial drilling turned up some material grades. An IPO would not distract from BRB gold aspirations at all. Therefore I believe this would be the preferred option. An IPO takes circa 3 months to get underway (if organised properly and BRB do have ample experience with public listing) and now we approach the 3 month mark since the presentation mentioned above. It may have been underway as preparation back even earlier?
An IPO would involve a retention of partial ownership for BRB share holders at a specific date. Therefore this strategy would fit with the stated aims. Li is hot as everybody knows and so an IPO would be attractive as a base level entry into an obvious deposit at this time. The details would only be speculation yet BRB shareholders may finally see value from this chance discovery and it could be lucrative. The share price could list at 20c and rise from there given market sentiment.
What would the M/Cap of a Li IPO be at this time? Would we get one new Li company share per BRB share owned? Could it be as high as 1: 6 shares held? Would the IPO raise $10M for 33% of the register with 66% held otherwise or will that be 50%. If it is an IPO valued at $20M, and 50% is held then BRB shareholders could be gifted up to $10M which is circa 16% or about 1: 6 in a distribution. The current M/Cap of BRB is a pitiful $60M approx. The deposit is less than 100km east of Kal for processing so an open pit Li mine could be rapidly brought into production (within mining time lines).
I am interested in views, and hence this thread. Regards, CW
BRB Price at posting:
16.5¢ Sentiment: Buy Disclosure: Held
