Hi Lenny,
Sorry but the roadshow has come and gone, a few hours too late with that rather good question.
Here are some dot points of what was said. Didn't have to do much asking as pretty much all the key questions were asked by others. However do wish I recorded it or took some notes as it would make this summary easier.
Attendees - Approximately 10
Panel - Mark Sumich (GBE), Bill Hayden (GBE), Jingbin Tian (ECE)
ECE Background:
- Has recently restructured to include mining and exploration within their organisation.
- Currently negotiating with other companies (copper and gold).
- Looking for the long term future of Globe with potential to dilute holdings in the future.
- Maintained clear line that aim is not to interfere with the company but help it grow.
Globe position:
- Main focus is Niobium and Tantulum.
- Work on other projects will continue, however they are still at early stages.
- Believes the deal is fair when taking into account last couple of years (minus the HREE driven spike). On the basis of past performance (not withstanding the experts report), this deal is fair and the 40.5c presents a premium.
- Management emphasized they don't care about short term shareholders, their focus is long term growth. Therefore won't be sucked into the various hypes (i.e. HREE) by releasing news every week to create these spikes.
Regarding concerns of interference with operations:
- ECE is not an intermediary or distributor of the resources Globe has.
- GBE required to make HREE available at market value due to binding undertaking with relevant governing bodies (if commercial amounts are found).
- ECE has fiduciary requirement to fulfil obligations of operating in best interest of shareholders, will be no value leakage.
- Price protection for Niobium exists as Malawi government has a stake and will ensure value is fair.
Regarding the controlling interest:
- Has had success with Arafura, however stake is different as ECE are far more involved in helping GBE from an expertise and monetary perspective.
- Lynas Corp attempt was also >50%, with market responding positively. However after the FIRB rejection, had to resort to capital restructure.
- Does not want a full takeover so as to keep steady mgt/team and allow ECE to use GBE to develop other assets. Many benefits to being a listed entity.
- Needs 51% to make it easier for ECE to obtain funding and contracts in China.
- Reality is there is nothing stopping ECE from performing a takeover, ECE rep reiterated that their aim is to grow the company.
RSL:
- No impact on projects. If anything, will now definitely have the funding to drive the project forward.
Niobium market:
- Price is stable and that's what makes it attractive.
- However still will face stiff competition with Brazil as they are the dominant player and price setter.
The key take home point I walked away with is that they want to turn their "spreadsheets into real mines" and need the funding to do it. They have investigated other options but ECE provides the funding and expertise they need to get the good stuff out of the ground. They also don't want to do what other companies do, which is perform cap raisings every year and continue to dilute shareholdings.
Tried to be as objective as possible in this. Feel free to shoot through comments or questions, although I think I've shared everything I remember.
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