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My theory SL
The number of occasions CB has referred to other buyers, and how inhibiting it is to only have one buyer with first refusal. It will be of no surprise if AA decline their right of option. In which case it would be seen as negative short term. But in reality this may be the best option to get a greater sale price. There was a question asked at last AGM regarding if less than 2mt was declared. CB’s response was it is better to prove up as big of a resource as possible before declaring. He could and probably meant within the budget and time constraints set. If ‘not’ then it may suggest that other parties have shown strong intent with a chance they know already Anglo will decline. So the need is, to go through the legal process to be free of the agreement constraints.
The other consideration that xtract may want to engage Anglo into the buy back mechanism just to not accept their offer, or 3rd party valuation to sell to a preferred major seems highly unlikely.
A world class asset in oz, what internal reason could they possibly have to turn it down?
Newcrest are certainly better positioned though
I need a lie down
And it's nearly Thursday...could there be another Newsday Thursday?
some nice buys coming in market starting to wake up
I keep posting the level 2 display on Telegram to demonstrate the below, but I can't do that on LSE.
The share price weakness isn't due to a sell-off. Today so far, there is more buying than selling but the MMs won't move the price. For example, since 9.14am there has been 1.2m in buys and 134k in sells. Ask over that period moved from 4.625p to 4.645p :)
However, over past days the Bid has been falling with minimal resistance and low volume. Its just MM games, but still annoying.
I think the shareprice is largely irrelevant at this moment as long as the African revenue ramps up.... removing the risk of further dilution (beyond existing warrants).
If we are considering the lionshare of the Rc or Br sale will translate to a special dividend then it can't get too worried.
As much as Colin is sworn to secrecy I still struggle with why the shareprice is looking so weak. With so much drilling going on and other work and discussions happening, including the recent mining conference in Oz, I am sure there is a lot of chat going on. With low volume it wouldn't take a lot of buys to lift the trade price. And with a big smile on Colin's face people would soon get the hint.
No idea and just clutching at straws but thanks for answering my questions. Unfortunately no spare cash or I would be grateful for the shareprice weakness.
But I suspect that If AA knew they were not really interested they may want Xtr to keep drilling and prove up the resource as much as possible so that an important competitor doesn't get a huge mine for a song. My point is that everything is guesswork at present. The only fact that really seems to me to have meaning is the strange observation that CB hasn't 'barked' recently. I'm fairly sure Sherlock H would make something of that!
I'm seeing quite a few green boxes, must be manicrick going off on one again.
>> Good post Steve, but shouldn't we also consider the possibility hat AA may not want to buy at all at the probable asking price?
Yes, that is a possibility. There are other more suitable candidates with nearby infrastructure who may be interested. The good thing about the AA buyout clause is that it prevents those other candidates getting a cheap entry before we have proved up the resource.
Good post Steve, but shouldn't we also consider the possibility hat AA may not want to buy at all at the probable asking price?
I completely agree Steve, but I would also guess Anglo would also want to see the proof that the localised region is fertile with further proof there is the potential for high grade gold that will support an early CapEx recovery rate, which would certainly account for the work to ascot and beyond the requirement from RC.
There is more circumstantial with evidence too, to support in favour than against
I am probably going to get accused of being over-positive here, but I am going to put forward a theory for discussion or derision :)
1) CB is normally very enthusiastic and keen to talk
2) He must be aware of the drifting share price and is most likely aware an interview would help
3) He is doing interviews for his other companies
4) Ergo, he either doesn't want to do an XTR interview for some reason or he doesn't believe it matters at the moment.
5) He was very specific and consistent in his view on potential deal timescales (although we know he is always optimistic)
6) Given his consistent line on 2mt being comfortably achievable, he would lose all credibility if that wasn't true.
We have always assumed that CB had the power to decide when to trigger the 2mt, probably by issuing a new JORC. However, we don't know the detail of the actual contract. For once, lets look at this from the perspective of AA. You are very aware of what is happening with XTR, but until the 2mt is 'announced' you can't do anything. However, you also would not want XTR to keep building up that resource beyond that point before valuation, especially if XTR geos were already aware they were past 2mt and were not saying anything. In fact, you might view holding back that information as being against the contract, depending on the terms.
Therefore, AA will want to begin negotiations as soon as there is reasonable evidence of 2mt, regardless of any official JORC, because they want the valuation to be based on the lowest qualifying amount of resource. So maybe AA are pushing CB to acknowledge when he has roughly 2mt based on the modelling by the XTR geos. Or, alternatively, there is an agreement in place to value the resource at a certain point in time, allowing for some limited drilling of Ascot, which is why CB was so specific about the AA deal timing. It would also explain why CB has stated they would go to AA as soon as 2mt was met, rather than continuing to drill.
If the above, or something on those lines, is true, then CB would not care about the share price because the share price would be irrelevant for valuation purposes. In that case, he wouldn't bother giving interviews to support the share price and he wouldn't bother with minor RNS either. He will be focused soley on sorting out the deal because that is where the money is.
I'm extrapolating a long way based on several assumptions, but I thought it was worth sharing :)