The CGS contains an amount of $45 million as Depreciation and...

First 265 Last

Share
Profile

Follow
SpaceWalker

375 Posts.

150

24/04/19

10:16

Post #: 38248114
Share

Originally posted by sydneyguy: ↑

Morning

I agree the decision not to transact last year has been a balls up because the Enterprise value of company now is so low that someone might as well go on market and get 100% of everything (Mt C, SDV and JB) for less than their 395M for a half share SDV.

The short list of parties is probably saying telling them this ,

BOD is probably opening itself up to one of these parties to just take the entire shebang as the EV of 100% of all assets has fallen below the asking price of 50% of SDV. Buyer might as well go hostile and get the lot and march the management.

Going it alone might be ok, but the Chairman and BOD should see that their hard line "negotiation" to secure long term value has actually created huge value for any potential purchaser as the EV has collapsed.

Whilst it was great that they realised a deal with posco in 2018, they have now killed their ability to negotiate with 3rd parties by not accepting market prices. None of them have acted commercially, yes SDV has potential to be long term asset but now it looks like someone else may potentially take all the assets and develop them for themselves because Chairman and BOD have taken this line.

Going it alone means speculation of capital raisings, EV may fall more making it even easier for them all to be out of a job imo

IF they want to keep a job they should sell SDV ASAP imo and use the cash to develop james bay, consolidate MT C operations and do a buyback,

Anyhoooooo, time will tell - but the lower the EV goes VS their asking price for a share of SDV, the more likely someone on the shortlist takes moves to take the lot or some new player enters and does the same.

Note the COGS figure of 128. M included in your figures contains massive depreciation and finance charges and expenses for MT C.

The EBITDA of MT C last year was 70.5M USD with its low grades and high costs.

Expand

The CGS contains an amount of $45 million as Depreciation and amortization. Based on a similar performance as last year the break even level for GXY would be around the c&f price of $650 a ton for spodumene.

GXY Price at posting: $1.55 Sentiment: Hold Disclosure: Held
Upvote

0 Great analysis

Reply