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JET47,
Personally, I think this is a good acquisition.
50% stake in a mine that will produce 3640 tonnes/year LiCO3 (net to Erris) that's at advanced stages of developments, and 1.35m eur cash.
And at what cost? - Dilution of your stake by approximately 70%.
I.e. total amount of shares in Zinnwald Lithium will be c. 130m shares
Zinnwald Lithium has a NPV of 428m EUR.
However, Erris will also be diluting shares further through placing at 5p to raise funds for this project.
So will have to wait and see what happens. Medium term, share price will rise as the development of the mine advances.
'... the intention is to return Erris Gold Resources to public markets asap.'
Whether I think this is a good thing or a bad thing depends on how long they take progressing the Loch Tay Project to the point where they do actually return EGR to being listed. That, and the share placing. And now I have to research the lithium project.
At a guess...
Your current "Erris Resources" shares will change name to "Zinnwald Lithium" when suspension is lifted.
You will be issued shares in "Erris Gold Resources" which will stay suspended until it is back in the public markets. I'm not sure if this will appear in your portfolio. And i'm not sure if you can even do anything with these shares until back in the public markets.
How will that work with the majority of private investors holding shares via brokers?
This is a new one for me!
From Erris:
"Your share in Erris Resources will become a share in Zinnwald Lithium and you also receive a share in Erris Gold Resources which will be spun out as a private company but as the Loch Tay project develops, the intention is to return Erris Gold Resources to public markets asap."
Note: New name for Eris will be Zinnwald Lithium Plc.
If anyone hasn't already, read down to underneath the accounts, to '9 Events after the reporting date'.
It's also noteworthy that David Hall and Osisko Gold Royalties which hold 32.7% of the existing shares have already voted yes to the Acquisition.
It is my understanding that Erris will split and become two different companies, Erris and the soon-to-be newly named Deutsche Lithium. Eris shareholders will be offered pro rata shares in both companies. Erris will be a standalone company separate from the new company. This should push the share price higher. I interpret this as Erris wanting to focus on Loch Tay and on lithium operations separately. As technically it's a reverse takeover Eris gets the 50% shareholding plus 1.35 million Euros.
Thoughts, anyone?
The EMH board has some excellent posts regarding European lithium needs. ATB
They say the aim is for Erris Gold to return to public markets
Lithium to be listed, Gold unlisted
Having re-read it and had time to think I wonder if it means we will have our shares in Erris Gold and there will be placing shares for the new company that we will get first dibs at?
Not too sure that I read it as Erris Gold will be a listed company initially
Yes, you will get a pro-rata share in Erris Gold Resources and your Erris shares will become shares in ZInnwald Lithium, an advanced lithium project in Germany. There will be some dilution but the value add and potential should far outweigh that
Happy about this.
A dilution, but high potential asset. Market cap going to run wild probably.
Im confused, its early and it doesnt take much!!
Can someone explain please?
Will we have shares in the two companies?
Erris Resources Chairman, Anton du Plessis, commented: "The Proposed Acquisition of a 50% interest in this late stage, high value asset has the potential to transform Erris Resources from a discovery driven consulting and exploration company into Europe's next lithium producer.
I have holdings in BCN / EMH / KDNC . Hopefully this will attract a lot of new investors. ATB
Well done holders