Solid support, page-21

JPS
AKI sold their project to Exxaro for more than $300 million. Brilliant deal. Exxaro then spent another couple of hundred million on the project and then wrote the whole amount off as a loss and sold the project to a Congolese company for US$2 million. Like RIO with Riversdale it was a total disaster.
Good for Congo. Bad for everyone else and especially bad for Exxaro shareholders. Good for AKI shareholders who got a cash wondfall.
EQX not involved in AKI's project and did not buy it. EQX's Mayoko project is nearby. EQX sold their Mayoko project of US$5 million but retain a royalty interest. EQX has a current market cap of circa $50 million which is represented by $40 million in cash and the Mayoko royalty and their Badondo asset and importantly NO debt.
SDl has a current market cap of $10 million and no cash and $100m in debt. Different story.
Westcott believes EQX should have and still should quickly spend all of their current cash drilling Badondo and doing exactly what SDL has done with studies and staffing and enviro work etc. I am not sure why he believes this is smart as if they had or did the EQX share price would also be close to zero).
SDL project is NOT similar to either the AKI/Exxaro Mayoko project OR the EQX Mayoko project. SDL is similar to Badondo.
SDL has wasted money like a crazy man for years and years. Spending circa $10 million a quarter on expenses. Crazy. Directors salaries were big but that is not where the $300 million spent has gone. Woudl be interesting for shareholders to ask where the money went. And to whom. Some of those questions are being asked now by authorities. Embarrassing.
EQX hold a similar asset but as a vastly reduced cost and haven't spent a lot of money yet on drilling or studies. And no bribes has also saved them a lot of money!
Not sure where EQX goes from here but suspect they are looking at assets in other commodities and other jurisdictions which have more upside for their investment. Market not interested as all in African iron ore plays. I believe it has been a smart move for EQX to hold onto cash as they can now invest it elsewhere.
I am sure Exxaro and Sundance woudl love to have their hundreds of millions back if they could! Just as shareholders would (expect for Westcott as he will tell you that you haven't lost anything as long as you do not sell).
J9