ubs appointment - why ?

Hi all

Agree that the main purpose of UBS appointment is either for capital raising, or IMO for merger & acquistion purpose. Since UMC still have $11m on hand (approx), the former option is definitely out plus the dilution factor is illogical at take place as they have adequate funds fo r their forthcoming drilling programmes - so, DO NOT WORRY about dilution via funds raising.

Now, IMO that UBS is appointed for one main important purpose ie. for merger, or acquistion reason (read UBS appointment announcement as it highlighted ie. ...UBS Investment Bank Australia has consistently been ranked as one of Australia’s leading M&A advisers !!!

UMC as an individual company is not financially strong enough to build its railway line as it is extremely capital intensive ! But if they acquired, or merged with another IO junior (with similar resources contribution than the company will attract private railway investors to fund the building of it)

Of the two (ie. merger, or acquistion), it can't be acquistion as UMC do not have enough funds on hand, unless it is done through share swap. Again, no Iron Ore juniors will agree to be acquired - thus, a friendly merger is the most expected reasonable option to occur. The merger will have tremendous synergy benefits for the the merging partners, in particulary, if they are located in Pilbara region (guessing IOH, FRS, AGO ? - pls advise which one is most likely/favourably)

I have recently spoken to MH (don't understand why certain shareholders complained that he is not responsive - this is not true - he did return my call promptly) - he mentioned in general about certain corporate negiotations going on (with no details provided) and at this juncture I can only speculate it involves M & A (especially so, with the recent appointment of UBS Australia, a leading M & A advisor)

All in all, I think it is "all very positive" signs and instos will also be happier to own a gigger resources company even to the efeect of dilution reason, or they maybe happy to acquire more shares in the new partner company.

DYOR - this is just my opinion

AngelofAngels