trent26...Thanks for the comments on my reply the other night…I...

trent26...

Thanks for the comments on my reply the other night…I thought it time I might try to underline the nature of what I do here at times, which I am sure to many is a subtlety entirely missed.

Rope the dopes comes to mind…except they think they are the ones doing the roping…lol

Anyway…as for CVI…

With CVI holding a "controlling interest" in Fortitude, which may not necessarily be limited to just 50.1% mind you, I cannot see any sense in an additional primary listing at this stage for Fortitude, either here or anywhere else, until CVI have gained more of her before adding too much value…at least in the interim.

But...if CVI eventually relinquish all hold on Fortitude as I suspect they will, then I see a case for an ASX listing as part of a future JV arrangement/s with at least one "major".

Before any such relinquishment however, we can probably expect to see CVI’s direct ownership in Fortitude follow their Longonjo efforts…as such I expect to see a similar series of “increased ownership” announcements for Fortitude as we have seen with Longonjo.

I probably need to be subtle here…but I also sense a certain benefit might be found in incurring “expenditure” for such things as increasing one’s ownership via share acquisition and/or providing working capital/development funding in exchange for Fortitude shares, versus other forms of capital outlay that might be typical of one’s “costs for doing business” in such an exciting region of the world.

I am sure you know what I mean.

Anyway, back to the listing issue. In my view any interim listing (prior to a complete spin-off), would only likely be a secondary one and attractive only if CVI decide keep their “ownership” of Fortitude below say 70%. Of course this would obviously be with the view to facilitate a wider spread of future funding sources...possibly London centric...so likely to be AIM?

Interestingly however, Dubai require at least 25% of a Company's stock to be listed on their exchange...so with CVI sitting on say a 70% holding in Fortitude, we have 30% held by others, which might suit this purpose, perhaps along with a limited Dubai IPO? Not sure however whether Dubai would be attractive for a non-hydrocarbon entity, unless of course some of those in Fortitude have specific Dubai links and would be attracted to such an outcome…Quest?

All conjecture, but it goes some way to help explain Smyth’s lack of reference to a Dubai listing of late...perhaps there has been a change of focus here and those initially expected to be in CVI for this are now in Fortitude instead?

Looking further ahead, if/when Fortitude is eventually spun off into a separate entity, in my view it would need to be stand-alone and fully independent of CVI due to the significant development capital needed down the track. As such, I expect no residual ownership for CVI in any spin-off, I expect it will most likely be listed on the ASX via an in-specie to existing CVI shareholders (CVI should have 60%+ by then), along with the usual, albeit limited IPO “invitation”…and of course, suite of seed investors on board.

My gut feel here is for an eventual resources entity which has entered various JV’s with at least one "major" (maybe two – BHP and perhaps a Chinese based group?), on select projects within their portfolio, with the view to achieving free-carry status on these, whilst perhaps concentrating on developing at least one 100% owned major project by themselves…CDB, Catabola? Meanwhile, they also continue to progress numerous other assets to an optimum value equation, where they too can attract JV partners?

At the end of the day however, what ever shape it takes, CVI will, via the progressive acquisition of Fortitude, effectively bank-roll their interim exploration/development and of course “working capital” requirements, for an ever increasing share, not unlike the progressive acquisition arrangement CVI have employed at Longonjo as mentioned earlier…all of which will eventually lead to CVI ownership of more or less the same percentage of the projects, for the same out-of-pocket expenses had they retained all the assets in CVI from the outset.

In this regard, one might view the Longonjo/Ucua “farm-out” as more of a reverse acquisition of all the other metals/minerals assets…a bit of a gift to CVI actually…but one, due to the buy-back nature of it all, a sort of delayed one.

The separation of the various assets I feel is also a sort of insurance policy built on a delayed reward structure (for both sides)…based on moving little bits towards the centre at a time…and one that requires a sort of gradual and ongoing process of “offerings” from one, to gain a bit more of the other. In a sense, the divide between what each party wants is gradually being bought closer and closer to the middle, until such time as the difference between the needs of each no longer exists.

We likely have many opposing views, needs, wants and expectations here, not only from all parties involved in the various deals, but possibly from outsiders as well. I wonder also whether the separation of Energy/Minerals assets were not part of the need for an energy specific US$100m facility that may not have felt quite so comfortable residing in the hands of a multi-sector entity?

I can also see other benefits for such a defined margin between assets and the groups involved.

In Fortitude it appears to me Smyth has bought together the key groups for his Angolan efforts under a single umbrella, yet in so doing has managed to separate the key “company making” areas of interest (ie...minerals/energy), so that each can be bought to a satisfactory conclusion without undue influence from the other. Minerals were the foot in the door…but Energy is clearly Smyth’s main focus.

We have the same people in each…and eventually all in one…but for now more in one than the other until the ferryman gets us to the other side?

In this regard, by separating one from the other, Smyth can also determine what direction each entity takes…OR DOESN’T TAKE…should a key aspect of the intricately linked “arrangements”, not proceed as expected.

In essence, we have plenty of fall-back scenario’s here...so if things go pear shaped, Smyth can have the choice to throw out the baby, yet keep the bath water!

Of course, this is an Angolan centric discussion…but I do believe Cameroon is an essential part of the mix, with an equally carefully planned “fall-back” path if the ultimate goals are not achieved…North Matanda of course being the fall back!

In contrast, had all assets been piled into the one entity (CVI), in my view Smyth would be hard pressed to ensure the ferryman got everything to the other side as pre-arranged, in preference for maybe giving up at the half-way mark…as it stands, renege now and the ferryman will be just as stranded the passengers.

There will be no half payments for a half done job!

If you ask me we are seeing a very sophisticated game of corporate chess here…from all sides…which makes me feel the ultimate “prize” must be viewed by all as being a very considerable one.

Smyth keeps telling us that “shareholders will make a killing” if only one project comes good, given he has pretty much achieved everything else stated to date, I find it difficult to understand the markets lack of excitement at such comments.

Cheers!