Interesting news out today about the takeover of Jabiru Metal by IGO.
The takeover premium is as follows:
- 44% premium to the last closing price - 50.2% premium to 1 month volume weighted average.
Now that takeover was a friendly one.
It is interesting to see that QMN's 1 month volume weighted average price is around 14 cents.
Further, it would be interesting to see a hostile takeover offer, and more so, a hotly contested dual hostile takeover.
Now Howard feels comfortable with the fact that he can increase the resource to 500,000 tonnes of copper.
The inground value of this is 500,000 x say $8000 per tonne (very conservative) = $ 4 billion.
Valuing the resource at between 10 - 15% of in ground value gives a valuation of between $400 million and $600 million.
However, based on what we have to date (250,000 tonnes), the figures are as follows:
250,000 x $8,000 / tonne = $2billion.
10-15% of $2billion gives a valuation of between $200 million and $300 million.
What I am trying to say is that if a takeover eventuated, selling out at even a 60% premium to the last 30 days weighted average share price is a steal.
Note also that the 15% valuation is probably a better valuation figure given the mining licences, plant and equipement and nearology to other players who are desperate for more copper.
Good luck punters.
QMN Price at posting:
14.0¢ Sentiment: Buy Disclosure: Not Held
