some doodles re irn possibilities

Just playing around with a potential merger of LAF with IRN-the latter being the acquirer?

Commonalities-

LSG shareholding in both -and Mr Widdup likes bigger picture scenarios as it adds value (usually) and ultimately makes an exit strategy easier to implement.

Management-both have a high exWMC factor in both. Positions appear to be somewhat complimentary, from exploration through to engineering/operational skills. Tony Robbins needs a break after two decades, Andrew McIlwrain is a first class engineer with youth on his side. Norris for business development/geology over view, Rod Watt is based their and has day to day skills extraordinaire/hands on exploration expertise.

Projects-Rapu Rapu demonstrated credibility and should be throwing out good cash flow in 2006 for a number of years. Tampakan is world class with Xstrata more than likely exercising its control option later in 2006. IRN dilutes back to one third of the project, if option exercised , and pockets A$50m (but then has to pay its way through BFS/project construction).

Balance Sheets/Financials-LAF has arounf $50m in debt plus another $8m in notes, with cashflow forecastes around A$30m next calendar year. IRN has around $30m now and is spending big time! Taking a date of 30/6/06 and puting the two together assuming the option is exercised would leave cash on hand around $15m plus annualised cash flow from Rapu Rapu increasing.
This would be plenty to do additional exploration plus contribute to Tampakan share of costs (and enhance project finance attraction for IRN's share).

Market Caps-at present LAF is approx $90m, and IRN approx $150m. Acombined scenario could easily see value north of $300m for the combination of Rapu Rapu and a third of Tampakan-cashflow, project skills, and a share of one of the best porphyry copper gold deposits on the planet.

Don't see any reason why this will happen tomorrow-LAF needs to bed down Rapu Rapu production between now and the New Year, IRN wants more good news on the Prefeas front. But by the second quarter next year should receive serious consideration???

Both would be benficiaries, but perhaps LAF more so?

Just a what if.........

Cheers,TAS