re: wrx geez tinky winky Sunridge’s share price is now C$1.90,...

re: wrx geez tinky winky Sunridge’s share price is now C$1.90, which gives them a market cap of C$63.265 million ($A equivalent of approx. $74.653 million). Sunridge’s only project is the Asmara project, of which it currently holds 40%, with an option to increase to 70% by funding the project to feasibility stage. However, they have exercised their option to acquire 100% of the project.

Is the Canadian market valuing Sunridge on the basis of a 40% interest, 70% interest, or a 100% interest in Asmara? It is difficult to tell. Clearly though, with a market cap of C$63.265 million, it more than likely would be on the basis of a 40% shareholding, noting that an allowance needs to be made for dilution in that they will have to issue a heap of shares to SBS for the acquisition/buy-out of their interest. For arguments sake, lets say it values out at the indicated 40%. If 40% of the project is worth C$63.265 million, the total value of the project is worth C$158.162 million (A$186,631 million). Allowing for dilution, and rounded down accordingly, I can see an independent 'fair value' appraisal coming in at around C$140 million for the Asmara project. This would seem about right based on what I have read and researched about the project, grades etc. and also taking into account the strong current metal prices and relatively small/minor sovereign risk.

As for the SBS share of that, I would hazard a guess after all the latest Sunridge drilling costs etc. have been added up, final percentages worked out and agreed upon, and say a final 35% SBS holding would be declared a reasonable figure. That being the case, SBS’s current holding in Asmara could be around C$49 million (A$57.82 million). Therefore, I can see Sunridge offering SBS around 30 million shares for the SBS stake /buy-out of the Asmara project.

SBS’s current market cap is lately on/around/between $30-$40 million. In terms of other projects it has the Barrick, Currie Rose and Dragon JV’s. The Barrick project is shaping up to be a commercial find. If all the assets were valued on a case by case basis, I dare say you would get up to the $80 - $120 million mark. So there should be a real temptation for Sunridge to launch a takeover bid for SBS as it may be able to pickup assets worth say $80 - $120 million for not much more than is required to pay as a result of acquiring the remaining interest in Asmara.

The valuation was initially expected in early April so who knows - they may be waiting on Lundin Group or the Bank to give them more money to do just that, but you've got to realise that big players ARE talking behind the scenes, and things ARE happening as we speak.
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