SLR is not dependent on the market for cash at present because they have plenty and with a scrip only offer to EGA they are conserving their cash for Rothesay mine construction and upgrade of the plant at Deflector. Hence, at the corporate level, they can be relaxed about the current SP. Apart from the dilution impact on existing SLR holders, there is nothing to hold back SLR from an increased all scrip offer but still a bit too early for them to want to do that. Of course, they may be content to simply pick up whatever shares they can and achieve a controlling interest. That leaves them shelling out extra SLR shares for the EGA Director options but still no cash involved (that is the EGA DIrector's 30 pieces of silver for their betrayal of EGA shareholder interests). SLR may consider less than a complete takeover worthwhile because it leaves the remaining EGA holders to meet their portion of any cash raising for mine development going forward. As an SLR holder, I consider the dilution impact of the bid of no concern because of the reward it should bring to SLR going forward and most particularly so, if the POG continues to appreciate as so many commentators and large investors appear to think. The blitzing of the SLR SP in the past few days certainly undermines the value of their EGA bid but without any news they just have to sit that out. The only decisions that they need to make are whether to up the offer and if so by how much.
SLR Price at posting:
94.0¢ Sentiment: None Disclosure: Held
