(Part of story) Here's a chance for a circa 20 per cent gain for those willing to wait a couple of months.
Chrome Corp has agreed to sell its only asset, a 74 per cent interest in South Africa's Ruighoek Chrome Project, for $41 million (28.5c per share).
Knock off 4c a share to buy back convertible notes and we're down to 24.5c a share. Allow for legal fees, other fees and tax and the deal's still worth a net 21-22c a share for Chrome Corp holders.
Chrome management has said it plans a 15c a share capital return, but needs to leave $8 million (6c a share) in the bank for the warranty requirements of AMCOL International, the purchaser.
Additional upside is the chance of another bid for Ruighoek. With Chrome Corp free of a no-shop provision at the end of February, the company is free to rustle up another buyer. No deal is a deal until all the conditions are met.
We hear there has been a bit of interest in what's a fairly rare asset. Chrome prices are not as transparent as the LME base metals staples, but demand has soared because of buying pressure from - you guessed it - China and India.
Post-deal, Chrome will be a cashbox with only vague intentions of reinvesting in another resources asset. Speculative buy.
CCI Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
