Taken from the MAK threads which was posted by Saracen an article from the Australian today:
Minemakers and India's NMDC differ over Wonarah phosphate valuation
WHILE few in the phosphate game doubt that Minemakers' Wonarah deposit in the NT is world class, putative Indian partner NMDC has a different perception of value to Minemakers' management.
Minemakers (MAK, 29.5c) this morning was moved to “clarify” a reported statement from NMDC chief NK Nanda, who asserted the state-owned company was set to buy Wonarah “for about $US15 million”.
“NMDC will complete the acquisition by the end of the month,” Mr Nanda told the Business Standard.
He said due diligence had been completed and the ensuing report would be submitted in a week.
But Minemakers this morning noted discussions had been about the Indians taking a 50 per cent stake “for a consideration which includes a cash component materially higher than the reported $15m”.
“In addition, no definitive timetable has yet been established for completion of the joint venture agreement with NMDC, although Minemakers remains committed to working towards an agreement as soon as possible.”
Presuming Mr Nanda has been faithfully reported by the sub-continental fourth estate, it's engaging in clever tactics at a crucial juncture.
A deal with NMDC was meant to have happened before Christmas and the delays have weighed on Minemakers' share price.
Given the 1.26 billion tonne deposit would cost around $2bn to develop, Minemakers needs a deep-pocketed cash source as much as the hungry Indians need phosphate.
Hence, it needs to talk up the prospect of the deal being done, while reinforcing the “you can't be serious” line about price.
The other point about NMDC is that it's not singly focused on Wonarah, last week buying a 26 per cent stake in Brazilian iron-ore explorer Amplus. In all, NMDC has $US800m slated for acquisitions.
While there's no guarantee the Indian deal will happen, we'll maintain Minemakers as a spec buy (we had the stock as such at 30c on February 14).
The stock has a $67m market cap, but this also includes the value ascribed to its Sandpiper marine phosphate deposit off the Namibian coast. "
LCY Price at posting:
14.5¢ Sentiment: Hold Disclosure: Held
