Ore processing agreement, page-5

I think you have missed a bit, subject to usual disclaimer that I have also probably missed bits.

Kin Delphi have over 10% of DCN, which means it is impossible for GMD to get over 90% of DCN. 90% is the threshold to compulsorily acquire the remaining shares for the same amount as the TO offer. Kin Delphi stopped buying once they were over 10% for that reason.

The biggest loser if the mill stays shut down and DCN requires more and more funds for exploration is GMD, as the largest shareholder. They need to own the mill and resources. Otherwise they will sink money into a forever exploration investment years from giving dividends back to GMD. They can't use their majority on the board to do sweetheart deals for mill access with GMD ... against the law. DCN directors can't simply act for GMD. GMD have to own DCN, majority control won't cut it.

Kin Delphi were never going to sell their shares on the market. There is only one buyer .. GMD, or, if the merger goes ahead, Hoover House. After four months have elapsed Hoover (or GMD if the merger fails) can make a new TO offer without having to compensate the 80% of holders who accepted the last offer. So come June if Hoover / GMD want to own the DCN assets, which they clearly do, they will need a new offer for the remaining DCN shares. I think they will have to pay around 100 million for those shares (50 million to Kin/Delphi), which still makes DCN a cheap buy. The mill is three times bigger than the SBM mill and quite new. The Redcliffe resource alone is worth that, and GMD got 80% of DCN without spending a cent.

For a second TO offer, the threshold for a compulsory acquisition of remaining shares is higher .. they have to get 90% (which they could if Kin Delphi sell at the new offer price of say 50 cents a share) but they also have to get 75% of all shares available at the time of the 2nd offer. In other words they will need about half of the remaining shares not held by Kin Delphi. Those shares will not come cheap ... they are held by holders who maybe paid over $1 for DCN and did not want to crystallise their losses in an offer worth about 11 cents. Moreover, my guess is the holdout shares are in the hands of people mightily cheesed off by the GMD directors of DCN shutting the mill and therefore ensuring DCN can't come good as a stand alone company especially if the gold price takes off. So maybe 50 cents a share is conservative. Whatever it takes to get those last shares Kin / Delphi would get, because in a TO offer all acceptances have to get the same deal. If the offer is increased early acceptances also get the increased amount.

I think for Kin the issue was always access to the DCN mill. DCN was making nothing from processing its own ore so they had to stop mining. They fed stockpiles through the mill, but they could have kept going as a toll treating company. Kin's ore would have been a good fit and my guess is Kin and DCN were close to agreement when the GMD TO offer got in the way. The mill is still there and Kin still has about 100 to 200 K ozs ready to go. The SBM mill is also in trouble because it can't make money from the Gwalia deep ore, and I am not sure GMD's Ulysses ore is the solution they say it is. GMD do not have a reserve -- only a resource, so without a DFS neither SBM nor GMD nor investors can be confident what ore is available and how profitable it will be. Kin has Cardinia ore ready to mine.

You are right to highlight the scary statements from GMD, but they have been trying to spook DCN investors with those statements from the beginning ... they are not new. The remaining DCN holders will not be moved I suspect. They know they have something GMD needs and will wait for a much better offer.

After four months GMD/Hoover could make a deal with Kin for mill access / transfer of DCN shares without there being a TO offer. If they waited another four months they could then offer whatever worked for the remaining 10%. If Kin got mill access plus the Redcliffe resource in exchange for the DCN shares that would be a good deal ... but no one has suggested that, pure speculation.