I don't know if anyone else saw this, I found it on another...

I don't know if anyone else saw this, I found it on another board:


Quote:
Monday, 11 December 2006

DEATH by skills shortage, now that's a novel twist in the boom which caught Dryblower's ear last week. According to chatter in the market this is exactly what happened to Omegacorp, a small uranium hopeful which has agreed to a friendly takeover by the Canadian uranium specialist, Denison Mines.

The trigger for the deal was not solely Denison's desire to get its hands on a promising asset in the southern African country of Zambia, rather it was difficulties encountered by Omegacorp in making progress with the Kariba project.

As Dryblower understands the situation, Omegacorp's attempts to take the project beyond the scoping study stage, up to the status of a bankable feasibility, were being thwarted by an acute shortage of skilled professionals.

Quite simply, there was no-one available to do the required number crunching and detailed rock kicking.

The result was a business in limbo, holding a promising uranium asset but unable to move, or moving at a slower pace than that demanded by the uranium boom which was ticking away in the background.

Fear of missing the boom, and the opportunity it represents to enrich its shareholders, is what pushed Omegacorp into a hunt for a partner, even if that effectively meant a form of corporate suicide.

But, having gone to the market and offered itself for sale the Omegacorp story might be taking a fresh twist.

The terms of the takeover are generous, exceedingly so when Omegacorp's history is considered, including the fact that Kariba was only acquired early last year, and the company split its shares on a four-for-one basis in the middle of last year.

At Denison's price of $1.10 that means anyone who's been sitting on a pile of Omegacorp shares is effectively getting $4.40 on the original holding.

That might not be all because the market in Omegacorp is indicating that some speculators believe an even higher price can be achieved.

When Dryblower last looked Omegacorp was trading at $1.13, and had been as high as $1.17, comfortable above Denison's offer which is itself 25% higher than the target's average price over the past 20 days.

In fact, it's a little better than that because Omegacorp shares have been marching higher since early October when they were trading around 58c.

Price and profit for the lucky investors who backed Omegacorp, which started life as a Tanzanian mineral sands explorer in early 2004, are only part of the deeper issue being raised by Dryblower.

That issue is the fact that a mineral explorer with an attractive (albeit boom-time) asset has opted to sell itself rather than battle the skills shortage.

On one hand this is an admirable thing because it achieves a fabulous result for the owners of Omegacorp, the shareholders.

On the other hand, it's a sad day when a mining project is unable to move forward because there are insufficient skills available to make it happen.

It's early days, and Mr Blower has only seen one example (so far) of death-by-skills-shortage – but he strongly suspects it will not be the last.