My bet would be that relief at resolution of the impending cash crisis will overwhelm disappointment at the dilution effect - but then again I'm wrong as often as I'm right.
IMO, TAA is a hugely undervalued company in terms of the supply contracts it holds and the unique licensed technology to which Al Baby and Mack referred. What scared off investors the past month was the sting in the auditor's report questioning TAA's ability to continue should certain events not pan out as planned.
This capital raising should put those fears to bed and allow a gradual reassessment of TAA's true value to commence. IMO, somewhere around 13 cents (or where the SPP was before the scare) would be fair at present, especially as this price preceded the excellent news on further success with SOM. The royalties this technology could generate down the track are mind-boggling, especially as the process works not only on tantalum and niobium but also widely used metals like nickel.
What mining company wouldn't want to boost its productivity by up to 30% while lowering costs and reducing waste? That's what the SOM process offers. And to think that TAA holds the sole license to that technology for a wide range of metals. I agree with Mack when he says this is where the real potential of the company lies.
The Norseman gold tenement also has latent potential and could be reactivated quite cheaply, according to management. The big news though came in June with the announcement of a long term tantalum contract (worth at least A$56m and potentially A$123m). These are clearly substantial assets in their own right and point to the company's excellent prospects beyond its recent difficulties.
I'm pleased to hear about the placement and if the market interprets it as a diluting exercise on Monday and punishes the stock, I might be tempted to double my holding. Those in the know should see the placement as a positive but you never can tell.
Gupper
TAA
tantalum australia nl
