Sifting A1M M&A prospects, page-2

Ash, thanks for starting this thread.

There are certainly a number of stranded assets out there in our region. This said most as we know are pretty average.

I've spent a fair bit of time looking at the region and i honestly can't say anything really fits the AC/Josef El Raghy playbook. If you look at what they have both done prior to AIC they have either started with an exceptional prospect and taken it the whole way or they have bought an existing mine and improved it, sold it and traded up. (Neither MMA or CNB fir this) Fundamentally what have they learnt along the way and hence how is AIC going to play out?

AC by my guess is 56/57. Owns c$5m in AIC shares. My main focus is on his wealth, and pride, going forward. When he started at EVN in 2010 the EVN SP was $1.02c. When he left at the end of 2018 it was $3.73. 28 minutes ago it was still $3.73!!!!!

This is my main point in this post. It took him and the EVN team 8 years to 3/4 X the SP and over the last 6 years it has gone up for a while but its now where it was 6 years ago.

To me lessons must have been learnt and having been bullish earlier in the year re M&A i'm now not so sure. There are just so many disasters out there or mines dressed up for sale which are simply un commercial. Look more recently at Red Lake (EVN post AC), Woodlawn (DVP), Fetch Metals acquisitions (Ouch!) and you could even add Firefly into this. Their Green Bay purchase looks lovely until you dig and realise its 5 - 10 years off any meaningful production. M&A is very expensive and dilutes like crazy, hence the EVN example above. Then you get the Woodlawns or Green Bays which are bought for peanuts but are either commercially not viable at current metal prices or are going to take years and years to get going, hence they are extremely cheap to buy....BUT the Directors then say they were geniuses buying them cheaply forgetting the reason they were cheap!!! With Red Lake EVN did the gold winning double, buying a lemon expensively!

Avoidance of dilution has perhaps been learnt?

Hence i've come to the conclusion that perhaps AC will hit the drill bit more seriously, via cashflows, and come out of things with a $20m payday. Nothing more.

That's a MC for AIC of $1b. In reality what does that look like on the ground? Its AIC producing 30,000t of Cu a year and a trade sale / takeover in a bullish market via a higher copper price. What might he need to get there....I think with the EM loops he received in March / April he has already identified a number of new drill targets close to Eloise. The Eloise Almanac was CHANGED / updated on the ASX end of April. New target zones appeared, in yellow, but very little comment has been made since. My guess is they will announce in the quarterly that they are about to get very busy drilling new targets, and again buy time towards committing to a 1.1mt plant. With drilling success they move towards a 1.5mt plant which would take them to the mythical 30,000t Cu....and the $1b MC without dilution.

Just my random thoughts Ash, no advice.