George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
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They couldn’t take equity, they are already at the max holding as per ASX rulings. It’s why they need to get shareholder approval for the second MTR tranche of the CBE CR.
Thanks - good point re funding of KML. On the other hand, why did they not take equity? CBE share price was A$0.03 at the time of the sale. Especially when it seems the £750k was ploughed straight back into CBE's fund raise at A$0.15. Wisdom of hindsight I guess, but when this sort of thing happens one does wonder if something should have been obvious.
I think its about timescales too; if you want a bit more risk and a shorter term gain, then a look at Cobre looks interesting, but given the story at MTR, though probably a longer term play still, there is still sensible upside.
Because mtr now own 21% of Cobre and don’t have to Fund 50% of what will be an expensive drill campaign millions of pounds. Mtr are sitting Perfectly with cash and investments about to payout NSR royalties from SFR and what ever cobre gets bought for. Then you have the 2% nsr on most of the KCB on cobre 100% owned tenements and with 57 targets wow could be huge. Just a shame very few know about MTR and that I put firmly at the feet of our CEO on crap communication. However he is a good deal maker.
Spot on Kamikaiza
Think we have a bit of a lack of understanding here. Ownership of KML implied continued expenditure on drilling - money MTR does not have or want to allocate in this way. We said all along that we would maintain our 21.4% stake in CBE, because that's the success story waiting to happen - as an investment vehicle (which is what MTR always said it was) that's a very sensible decision. We now have a very big slice of a company which is seriously on the up, with no exposure to the running costs of KML.
For parallels and potential pitfalls, check out how MOD got on with their discoveries....
Also, from RNS on 16th June:
“Whether or not Cobre elects to acquire the entirety of Metal Tiger’s KML shareholding this deal marks the end of Metal Tiger’s project investment division, and the company will no longer consider joint ventures as part of its strategy. By no longer needing to be committed to funding a project which requires monthly cash calls the company will free up resources to implement operational improvements to optimise the assessment and management of potential and existing investments. This transition amongst other corporate strategies which are in the process of either being implemented or evaluated will allow the company to operate more efficiently, improve the investment story and create a platform from which the team can focus on substantially growing the company’s net assets. We are excited by the transition this deal allows for the business and we will update shareholders on further progress across the business at the appropriate time.”"
It's worse. They had 49% of the project, sold 24.5% for £750k and granted Cobre an option to buy the remaining 24.5% for £750k any time within the next year. And looks like they used the money to buy some shares in Cobre's placing.
Cobre is going up off the back of a discovery on the Kalahari metals prospect. 2 months ago, Mtr sold their 25% stake for £750 000 to pay for "running costs". Cobre's market cap is now around £40m pounds, almost all of which is based on the recent discoveries.
Obviously nobody could have seen the discovery coming, but knowing drilling results were due in 2 month, and having made the initial investment on the hope of a good find, how the f**could they justify selling a potential £10m in value for £750K?