Billmac if there has been no collusion but mearly tough negotiation on the part of SLR then I have no issue with them making their play for PRH. The two deals they have proposed (merger then asset sale) maybe are the best options so far presented to PRH management. Another plan (heard via the grapevine) that was put forward to PRH (to perhaps provide funding via a placement) apparently would have been even less favourable to shareholders because of a huge dilution factor. This could have kept PRH solvent and drilling for perhaps another 12 months or so only.
However, to me it seems PRH management have conveniently dealt themselves out of any negotiating position very early in the picture through the exclusivity conditions afforded SLR. Added to that it has also been alright for SLR to make an offer subject to a whole list of its own conditions. Hardly a clear and forthright offer particularly when the actual value of the offer varies subject to the SLR share price. We all would have prefered a more conventional and transparent takeover offer for PRH (warts (with fair due dilligence)and all).
It is certainly a buyers market amoungst those junior miners who are struggling to finance their projects. However, I am not sure how hard or expertly PRH's current management has tried and as you say lack of communication to share holders over the last six months is good reason to have doubts about them.
The way SLR's current offer has evolved with them potentially grasping 19.9% of PRH shares dirt cheap through their convertible notes position make me wonder why PRH management did not in the first place approach some major shareholders for additional funds under simmilar favourable terms. Strong support from major shareholders would have then underpinned another SPP to all shareholders. These funds could have then funded further exploration and DFS no 3 when the banks and metal traders are more interested. Perhaps it is the perceived reluctance of the current Chairman and CEO to keep things going on a tight budget! What a shame they have lost the vision.
It is probably not too late for shareholders to block the SLR offer and support a SPP on the back of some key shareholders putting up some cash, finding a new cornerstone investor, pay back the convertible notes and find some dynamic mining people (very critical) to run the company. Perhaps we could change the company name again and have another consolidation - that's a joke! But "Great Southern Minerals" does have a nice ring to it!
Phillips River is a Substantial Asset!
PRH Price at posting:
1.5¢ Sentiment: LT Buy Disclosure: Held
