Hi davo77, the worry - correct me if I am wrong - is that if SGG...

Hi davo77, the worry - correct me if I am wrong - is that if SGG get 51% they will take the rest off us. A cap at 51% keeps them happy, cheap capital markets open and a large liquid base on the ASX. The Board balance in Australian favor sorts that level as well. This way we could get the best of both worlds.

I will be talking to an old friend today at length about the deal because he is a 'corporate deal' trouble shooter and facilitator for a multinational. He specializes in Asia. I am expecting further insight from him.

Cazzex - I would like to add a new angle you seem to have missed. The market cap at the new base offed is set at $440M approx. That is FML + SGG capital - the new structure.

Nepean alone could be built into an asset, subject to successful drilling - looks likely - of $1B+ based on earnings. Capital required so not possible on our own at this stage and for a long time to come without SGG.

LCowan is very early however I know the majors are watching from feedback I have heard - 4km anomaly at that address - should we prove up a multimillion ounce deposit at speed thanks to lack of capital restraint; then we will develop it. The potential value is unknown at present however I would suggest it is larger than $440M. Proof needed.

Laverton only lightly drilled needs a mill in operation and scale could be valued at much more than the $440M in its own right. Needs Reserves and production in house or combined with BGSM as well to be huge. Value potential huge.
Coolgardie just starting to shape up - ditto.

We could be looking at a very large company but you need money to realize this or you can find your investment bumping along under capitalized as they are now - or worse snatched up for very little - broken up and floated off so some hostile suitor can develop which ever asset they desire.

I think $9B is possible with time but way too early to put a figure on it. Far more likely with adequate capital lets face that truth. They will need an EPS of 10c per share or $900M PA EBITDA at least to achieve this. That would require a margin of $1800 an ounce at 500k oz PA or less if you factor Ni.

This seems over the top as you would need a gold price of circa $3000 / oz to achieve this outcome. The thing is, I have seen P:E ratios of 30 so pull that margin back to $600 per ounce and it starts to sound reasonable. The companies with large value have Reserves that the big end of town can value as mine-able ounces. This is the stated aim of the new entity and they will have the capital to achieve this. The ground position supports it IMO.

Lastly...
Am I assuming capital wants a return I hear above? Ah yes I do assume that its like saying a husband will be expecting sex in a new marriage - no 'brqainer' IMO.

The 51% may just be saving us from a worse outcome have any of you considered that? Some have already assumed the worse and sold I am sad about anybody making a loss.

Australia was sold out a long time ago, some of our largest mines, property, plum assets have no Aussie stock involved. We gain 49% of something far more significant with this deal IMO.

Cheers,
CW
DYOR&DD