Short Term Trading Week Starting: 03 Feb

STTCOMP CXX FA LONG

Slightly updated to make easier to read.

Cradle Resources Limited (CXX) is a mineral exploration and development company in Australia, which focuses on development of Niobium. CXX has 50% interest in the Panda Hill Niobium Project in Tanzania.

Summary:
Cradles project in Tanzania has previously been offered a takeover offer of 0.33c in US Dollars, The board had accepted this and the takeover was proceeding. Tanzania decided it wanted more of the revenue from mining operations in the country and changed the law. The law required the government to be allowed a ~16% in every mining project. Naturally, this triggered the cancellation of the takeover in terms of the takeover agreement.

There have been some major companies finally getting approval after negotiations with the government and the laws and regulations have finally become clear in the country, this is allowed big companies to move forward with their mines (IE Barrick Gold), the agreements are seen as a template for other companies.

During this time Tremont ( the acquirer and largest shareholder ) and CXX have been negotiating ( waiting for the laws to become clear ) after mutually agreeing to delay proceedings until May 2020.

During the period of unrest the share price has significantly fallen due to uncertainty but with now things looking a lot clearer it is my opinion this is an excellent opportunity for accumulation.

The Facts:
Top 20 Shareholders hold 83.04% of shares on issue.
The CEO/MD has purchased $130k worth of shares on market all the way down.
The CEO/MD is a large holder
1.3M Cash (very low cash burn during holding pattern plenty left to see it through to takeover )

Timeline:
1. CXX Moving forward with the project
2. Tremont all-cash offer of .33c per share
3. Board accepts offer
4. Tanzanian Regulations issues ~2017
5. Tremont disputed offer due to disagreement ( stalling )
6. The company is run on a shoestring during this period.
7. Tanzanian Regulation subsiding, mining grants issued and the country is back mining.
Now => Shareholders agreement arbitration meeting to be resolved in May, could be resolved earlier.

Why invest?
Most likely Tremont will acquire the project at .33+ cents, likely higher due to $AUS currency devaluation during this time.
In the event they do not the offer will be retracted and the share price should head back towards its asset value of .015c per share
The panda hill asset is valued over 20m, just over double the Market cap of CXX (10M)
Project fundamentals are excellent regardless of the takeover.