Nwws and Value of Newco7 Nov 2018 19:06
From the RNS:
"Premier has agreed binding conditional heads of terms to acquire the assets of KME ("KME Assets") for an initial consideration of US$4 million, to be satisfied by the issue to KME of new shares in Newco representing approximately 20% of Newco's then enlarged issued share capital..."
Bringing KME in for $4million and that accounting 20% of Newco places an indicative value of $20million on Newco as a whole, or $16million on our portion of it (at 80%).
Then;
"The Acquisition is conditional, inter alia, on Newco raising up to US$6 million, in either debt or equity, with such assistance as may be required from Premier, at or prior to listing to support the immediate re-commencement of underground mining at RHA Tungsten Mine, exploration drilling and related work at the Zulu Lithium Project, resumption of exploration activities at Katete and to provide working capital for the enlarged Newco and the expenses of the proposed listing ("Funding")"
That $6million is working capital designed to ensure we have means to make genuine inroads into each respective project. That $6million/$7million isn't the subsequent valuation of the company, as is being suggested by some.
On top of having the means of progressing our projects, and there's a lot to do, we can hire out that equipment to generate further revenue (in a country where mining is a major industry).
This approach enables us to keep far more those projects than we would have otherwise (if we think about some of the other possibilities that had been discussed).
The proposed deal offers a robust plan going forward. Those invested and investing over medium and long terms will benefit significantly.
In the near term, we await to hear about RHA ownership. While our Circum stake will be allowed to mature.
Having had time to think, and while the SP drop has hurt me again, I'm now more comfortable with today's proposed deal.
Good luck to the genuine holders and folks.
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