sale price, page-40

Prior to the sale announcement, the market was valueing Linc (incl all defined tenements and operating facilities) at less than a $1.00, pending some form of sale. A great entry recent point from the market that was looking like going lower.

This sale has monetised one tenement sale at NPV cash components $500Mn plus $2Bn (?balance?) in deferred royalties - to be considered a deferred income stream which LNC does not have. The terms of which will be very relevant and closely scrutinised (to stay in or go).

Capital gains will be paid offset by current LNC operating expenses - 50% of the net capital gain over some improved capital value will be used. It will be an ATO ruling on how/when the royalties are taxed (possibly a deferred tax component) - the capital gains event is at the point of sale (today). I would imagine the royalties to be taxable when the benefit is received (hence can be deferred). But is up to the ATO - the sale event was now.

On balance, a $2.00 SP would be a reasonable peak value of what has been monetised so far to date. Any higher would be speculation on the worth of the remaining 2 sales until they happen.

Then erosion of the SP would be a reality IMO from a peak unless capital growth/preservation from these levels can be attained. I don't plan on holding once a peak is in.

LNC won't have an industrial revenue stream for 4 years. Capital costs using own capital saves on borrowing - but I would be borrowing against it rather than using it myself. Makes for better monetary control.

In all, IMO $2.00 represents a reasonable peak return on investor capital so far. LNC might be pressured on returning some capital to shareholders, but this would only be a teaser - and only when other non-core tenements are sold.

A great deal? Effectively $2.5Bn for a single tenement - of course it is. But this will have a mixed reaction on the SP. It monetised a higher value of the prevailing SP, but not in immediate liquidity.

I'll be happy to get $2 on this news.

rgds,
pw