Blencowe Resources: Aspiring to become one of the largest graphite producers in the world. Watch the video here.
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DQ - enjoyable read that fella
Hi jux - absolutely. The potential scenarios here are quite mind boggling and I imagine the intrigue going on behind the scenes would put the game of thrones to shame. As the story unwinds I find it utterly riveting. There is definitely a book to write here (especially if a new major was to emerge somehow from this) and I might have to give Nick a bell. As for those assays you mention they might well be the light that blows the powder keg.
Hi DBW - but what a nice problem to have and hopefully one that continues as news from each of the many other regional targets starts to land ??
Juxta .... plus we must be 500m+ down hole 2 by now .... wonder if they’ll announce another extension to planned drilling depth ?
DrQu
I agree with that.
The majors don't want to start a bidding war: its big enough to share (as they often do on major projects) and they were hoping to do the usual trick of a "stealth acquisition" on the cheap by funding development at cost (ie minimal premium).
NM put paid to that plan with the Franco Navada deal: he is starting a bidding war by putting himself forward as a credible contender to take this into production.
The majors are now forced into the bidding situation and the curiosity in the mix here is personality. It is entirely irrational that the "minnow" partners are not standing together against the predatory majors. Will the majors want to work with NM ongoing? That aspect makes the outcome so unpredictable and the story is gripping, as NM twists and turns with the slipperiness of an eel.
And for the next twist..............Porvenir assays.
Nice post Dr
I also think he’ll be squeezed into showing his hand in the very near future . No doubt whatsoever that the greatest prize for shareholders is to take this to production.... the problem is we no longer no what “this” is ..... Cascabel? Porvenir? Rio,Blanca etc
I don’t see a possible scenario where he is allowed to do this .
In the meantime we must be 500m+ at Porvenir...
Whether Nick truly wants to build a major (which can be achieved by joint venturing on one or more of the likely assets as well as completely going alone) or he is looking to ensure he gets the best possible price for SOLG his actions for now are one of the same. To achieve either he needs time to convince us/majors he has multiple tier 1’s on his hands and that he can fund the development of Alpala. He does that successfully and at some point I see us share holders getting to choose between a long play with quite literally an incredible pot of gold equivalent at the end of the rainbow, a very juicy price for the company in the shorter term or something in between (joint venture some / going solo others).
All that been said it’s now upto the other players to make the next move and deny him that time if they are to get the best deal for themselves.
Any major wanting to own SOLG outright will not want to start an expensive bidding war. Most will be looking to see what BHP and Newcrest do next and how Nick responds before showing their hand.
BHP will surely be behind the scenes asking Nick what his price is and/or how they can take this thing forward together. He will frustrate them for as long as he can.
Newcrest will be wanting to secure as much of a stake in Alpala for themselves as they can get (with anything else a bonus). I imagine they also are actively engaging Nick to further these ends.
As soon as either BHP or Newcrest suspect Nick won’t play ball or is in bed with another party they will move. For BHP that might be an immediate hostile bid (I see that as their best option for success in terms of time/simplicity/overall expense). It would have to be substantial to convince the majority, given they can only otherwise count on their own 14% and CGP for support.
For Newcrest that might be be an actual approach for CGP or been seen to be serious about such an approach. The former guarantees them a place at the table when it comes to Alpala’s future and the latter might be enough for either Nick or BHP to come to an accommodation with them.
Nick I believe will be afforded by both some time but not too much. Whatever his ultimate objective if he spends this time wisely (and/or gets even luckier on the exploration front) it will prove very fruitful for us PI’s (one way or another). If he does not I believe he will force Newcrest and BHP to reach an accommodation with each other, the worst outcome for PI’s. Assuming CGP would support such an hostile move, they have 35% of the vote and a low ball offer could then succeed. For the moment the longer the current status continues I think the better the outcome on our side.