Well Grouch, personally I prefer a reasoned appoach.
Keep in mind the big picture. To my mind NQM is a superior company than either of its suitors. Proven operating expertise, high grade, continual mine life extension, huge exploration upside. However, it opened itself up through poor, almost boring promotion of an exciting operation.
So a choice has to be made. What do we have.
In reality there is a takeover offer and a merger proposal(HSK is a takeover offer in name only). One removes 80% of the Pajingo upside, one maintains the status quo.
Do we want to accept an interlopers takeover offer and tell our current mine partner to take a hike with their merger proposal.
Lets think it through.
Why does CQT prefer to spend a chunk of its money on buying into Pajingo, rather than applying it towards its own project. There are two possible reasons.
One could be that CQT sees strategic value is released from NQM operations, with CQT ownership. CQT has mentioned the 700,000 tpa mill has spare capacity, which it could fill with its own ore. This is bogus logic. There is short term spare capacity, but that will be fully utilised over the next 2 years with NQM's expansion. There will be no spare capacity.
Imo CQT is incapable of enhancing the Pajingo operation, so the only reason for initiating a takeover is the hope of acquiring assets cheaply. How exactly is this good for NQM shareholders?
Despite the obvious, some would say it really is. That Mt Carlton is fantastic. At this stage that's a hopeful guess imo. We know its high arsenic, polymetallic, refractory, likely concentrate impurities. No thanks. Klien is a wheeler dealer and marketer and not to be underestimated though.
HSK also has its negatives. While the offer gives NQM holders free exposure to Los Santos and the Canadian operations, there are also doubts. Will Los Santos perform (this is the big question), will directors be committed to enhancing shareholder wealth. I see hopeful signs on both. Refinancing is required in 2011.
Weighing up the big picture, I prefer the merger.
Propaganda doesn't do it for me. A bit less venon and a bit more logic please.
Marwoode ? you are correct. CQT don?t have a buyback. Re HSK, I wouldn't anticipate big money would be spent.
NQM Price at posting:
30.0¢ Sentiment: LT Buy Disclosure: Held
