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So do we think DOID are going to start buying shares on the open market now, with the DP so low..?
Who knows, it doesn't look like it though as no volume. But just thinking about the HoA and the fact that people are saying it's dead in the water. If that's the case and Ars knows about it, that would be price sensitive information and they should RNS that fact.
So the fact they haven't either suggests the deal is still on, or Ars is keeping that from us which is naughty, or DOID have changed their minds and not informed Ars.
Iâm one of those who has a strong view the HOA wonât be happening as announced, but I suppose DOID have probably intimated theyâre just considered their options and will discuss further.
âThe Company and DOID are advancing discussions on a preferred path for consolidating the strategic partnership between both companiesâ from the RNS would cover this.
Realistically theyâd be mad to sign up to those terms, hence the change in the story that DD completed the deal.
I see 3 main options from here, assessed in likelihood order.
1. Full takeover offer. On the assumption DOID weâre happy (as they formally announced) with the DD the risk is now less than when they signed the HOA as closer to funding and Asiamet much cheaper. Plus the reward higher due to BKZ.
2. A new agreement whereby DOID take a bigger % of KSK (similar logic to above) and this would also resolve Asiamets funding gap.
3. Theyâre not interesting in a partnership at this stage. This would need to be communicated to the market and would assume they werenât happy with the diligence.
As to when any of the 3 will play out my guess is after the revised feasibility study and further ITE /bank review which will strengthen their confidence further. Commercially however they might think itâs worth a crack now at the low levels.
What I find poor is as recently as November Asiamet weâre targeting funding being in place by now. Did they not realise theyâd need to do a revised feasibility study or did they mislead about this?
The last RNS did state that DOID we're happy with the DD, so let's assume not option 3. I guess if options 1 or 2 is happening what would Ars accept?
The resources still have inherent long term value and maybe more value creation to come. It would be odd to also employ a new CEO to then sell the company on the cheap.
Ars aren't in a great position I guess but Tony did say they're financed to the end of the process. Certainly ÂŁ25m for the whole co seems not a lot to me.
I donât think we can completely rule out 3 because the due diligence was to confirm the deal and theyâve seemingly backtracked away, so itâs speculation as to why isnât it. Donât forget they had their own consultants review it first, following which DOID sought further help from the ITE.
ÂŁ25m is todays value, I canât them bidding at todays value, surely it would need a significant premium from this low? I think their initial investment was circa 2.20 and I could see them being prepared to pay that and shareholders accepting given the apparent lack of alternatives (5 interested partners last August became 2 serious ones)
So, and I might be wrong here, the HoA valued BKM at around ÂŁ80m and the price of copper is still above where it was when that was announced. Yes it's coming down so with the global threat of recession but long term value is still positive.
2.2p would only value the whole co at around ÂŁ42m. I know the market is saying something different but that's quite a change in not too long a time period.
I think copper may have actually dropped since November - it was on a sustained run of over 4p.
I think youâre broadly right on what the HOA values KSK at, since when the resource has grown. But that deal hasnât completed and doesnât look like doing so itâs not a concrete starting point. However, hopefully DOID can see at todays values theyâll be getting a great deal compared to what they *provisionally* thought was good in November. Personally Iâm completely sceptical about whatâs going on, the RNSâs are full of holes/changing accounts.
Fingers crossed the value underground rescues us.
Yes, maybe I'm too trusting of what comes out of Tony's mouth when he said 'investors will be well rewarded' . It sure doesn't look like it at the moment.
He may well have thought that and may well still be right - I wouldnât hold that against him. I do however need an explanation as to why every single milestone from their November presentation has been missed. I donât know how long it takes to get debt arranged, but he should. He either didnât know a bank would want an updated feasibility study or he did and misled us. Iâm honestly not sure which is worse!
Well, I guess the AGM will have some interesting questions. Can't make it but would like to be there in person.