Member Info for dictumdedicto

Leehardcastle...

Totally agree. The more I dig into MTL, the more attractive it looks. As I've mentioned before, I think a potential re-rate 3x current SP could occur during 2025. The combination of MTL and CNR = value add, potentially 15p in the not-too-distant.

I'm sitting on all my CNR shares and remain surprised that the market hasn't tuned in to the arbitrage opportunity staring them in the face. Buy CNR and get perhaps 15% free value in a matter of weeks. So much for the EM hypothesis...(or is there still something we don't know?).

My first thoughts are now on the MTL board. We all need to be pragmatic. The deal has been done and Calibre don't seem interested.

Time to move on and make the best of (what may be only temporarily) a sorry tale.

Absent a better Calibre offer, or another serious alternative, it looks like I might as well move over to MTL.

I'm holding on to everything I have at the moment but will redeploy the cash when it comes. As per my MTL board posting, what I want now is development action, not words about selling as asset.

The king is dead; long live the king.

In a post CNR world, MTL will have around 2.6bn shares in issue.

Do we see a 10:1 or more consolidation in the next 12 months?

What do we see the combined market cap moving towards early next year, assuming that the whole will be greater than the sum of the parts? Adding together two marcaps is a simpleton's approach to valuation. Condor's value has been suppressed by then fact that the Bod shifted expectations from being production oriented to being a 'sell the asset' outfit. In my opinion the result of that was at least a 50% discount in MV. Bottom line in that a serious development oriented BoD could generate tens of millions of MV by simply announcing a credible plan to develop Condor's $1bn + asset. Add that to the existing MTL cashflow and other development prospects and I don't see why £250m of MV could not be achievable during 2025. In other words around 15p vs 5.3p today. Yes, there will be potential dilution hits and other project finance aspects to figure out; nonetheless I still think an experienced miner can get the market on board and support that sort of valuation - even in 2025.

There's a couple of thinks to chew over.

A first post on this board.

I am indeed unhappy with the MTL offer for CNR, for all the reasons discussed at length over the past few days. However, I'm also a pragmatist. I'm dubious about whether Calibre, or any other third party, will come in with something better in the next few weeks so I'll have to run with it. I'll take the cash but stick with the MTL shares, at least until I've had the time to run the numbers on MTL's current plus CNR prospects.

What I do like about MTL is that you've actually done it. While Condor's board have been faffing about for two years trying to sell a $1bn + resource for less than 10% of that, MTL has generated tens of millions of cash flow. On that basis alone it is a no contest situation.

Having accepted what I cannot change, what I now want from MTL is a firm, and expedited, plan to exploit the resource. What I don't want is another 12 months of talking about how much it's worth. Just effin do it. I say that with the perspective of being a 15 year shareholder in CNR. Too many promises and too little actual results.

...in theory the SP should arbitrage to the offer price of 33p, if indeed that's what it's actually worth. The MTL bid closed at 5.3p tonight. Circa 21.5p (4.0526 x 5.3p) plus 9.9p hard cash = 31.4p, with a possible upside on MTL shares over the next week or two. So why is the CNR bid still sitting at 27.5p? There's almost 4p of free money on the table as of CoB tonight. The deal is not a good one for LTH in CNR though I'm surprised the STH haven't worked this out. I don't expect anything close to 44p as the CVR has no present value. However, I would have expected a PDQ move to 31 - 32p. A 14% uplift remains on the table.

You might have thought that the market price would have moved closer to the offer price, at least the 31-33p cash and paper range tabled. Not only has the SP not moved, but it has actually dropped a little, several pence below the base offer. The market also thinks the CVR is worthless given that there is no CVR DCF element captured with today's CoB SP (where is the 11.1p CVR NPV in the post offer SP?).

Mr MTL says it's worth about 32p while Mr Market thinks around 28p.

It also looks like the market doesn't think a bid from Calibre or any other third party is coming either.

We've had a lot of promises in the past about mine building. All I'm seeing at the moment is a £65m possible offer with little else. If you were in my shoes you would want to see a return on 15 years, not another 'jam tomorrow' promise.

A few random points.

What has really irked me (and others) about the CVR is that it seems to assume that smaller investors lack intelligence, vis '..if you are dumb enough to believe that the CVR is worth something, then you are dumb enough to be taken out at (circa) 30p.'

The actual bid value of around £60m is not far adrift of what has been invested in Condor over the last 15 or so years. In other words, we will you your money back i.e. no return on taking the risk and time. NBV at December 31st 2023 was £53.2m with current marcap £55.7m. Accumulated losses over the years account for the difference between these 'valuations' and the actual amount investing in proving up the resource (too complex to accurately calculate but likely approaching £70m). At the prevailing MTL price (today) the offer is worth £64.8m or 31.8p/share.

If warrants are on the table I would want the strike price to be any more than the prevailing price on acquisition.

As for Calibre there is nothing stopping them making a hostile bid at any time before any other deal approval by shareholders (assuming company sale vs. local assets). I doubt they will be influenced by deadlines other than those of an unassailable legal nature. I'm not holding my breath on anything today if that's what is in the mind of people.

MTL need to get to at least 45p by some credible means. Even at that price it's a complete steal. The easiest way (from a CNR shareholder perspective) would be to up the paper offer from 4 to 6. I'll run with that if they do, as I think will many others (despite the fact that we would really like a cash payout after 15 years invested).

If I'm honest I don't actually know why bidders (other than Calibre\Metals) have not yet emerged from the undergrowth. I still half expect a bid from an unexpected quarter. But we'll see...

I think the £92m is really the crux of the problem. MTL know that anything below £100m is a steal, but they don't actually have the firepower to put a credible deal on the table. Thus it's a case of how close they can get to £100m without actually shelling out much real money. It looks like their pain threshold starts to kick in around the 4 shares per Condor share, above which they might get dilution challenges from their existing equity base. They have cash but not that much hence 10p. Cash is hard to come by, and they do need ongoing working capital, so it looks like they can't really take the risk of stretching much further. It's the CVR element which is the main problem. As of today it actually has zero value so in my view it is patently dishonest to represent that it has.

My challenge is this on the CVR:

I would like to sell you Mr MTL the right to the (potential) income from the CVR. In other words assume it's a tradable security. How much are you prepared to pay me to acquire that CVR right at the point of asset acquisition?

As far as I'm concerned the amount you are prepared to pay me represents the intrinsic value of that (notional) CVR security. It would be of great interest to me to see an offer on the table for the CVR.

I've drifted off the point I wanted to make. The bottom line for me is that MTL can't really afford CNR if all that can be offered is 10p + (20p-23p) + 0p CVR value.

Meanwhile Calibre equivocates over whether to go over the heads of the CNR board with a hostile offer.

My view.

I have come down from 120p to 60 - 65p, and then to 50-55p; all in a situation where gold has rocketed. Thus a part cash part paper bid of 30-33p is way off the mark, the CVR of course being a nonsense number.

I could grudgingly live with around 45p. To achieve this the CVR needs to be dropped (it's misleading including it in a deal valuation) and replaced with 6 MTL shares for each CNR share with the rest in cash. I would then stick with the MTL shares for at least a couple of years.

I'll run the numbers on a notional 100,000 shares @ 45p i.e. £45,000

Today's MTL CoB @5.2p @ 6 for 1 i.e. 600,000 x 5.2p is £31,200

The cash balance would be £13,800 (£45,000-£31,200) i.e. 13.8p

In other words 13.8p per Condor share plus 6 MTL shares; roughly 45p bid value.

204,440,000 at 45p is a circa £92m offer. Similar to the £90m tabled but with real money and paper; not a meaningless unactionable CVR promise. Still at least 10% lower than my lowest expectation but I would take the MTL shares in the hope that they would eventually realise the embedded CNR value.

What do others think?

I guess JM didn't make a lot money committing to 'irrevocable' undertakings that actually lose money.

'Hey Calibre, JM here. The door is still open, whatever you read in the press, or in regulated news releases...'

MTL's offer that isn't an offer appears to have been knocked back before it was even made....

'Hey MTL, JM here. Get serious. If you are going to make an offer, make one that investors can accept...'

The mining expertise would be there, and the will to actually build a mine. It might actually be a better formula for all round. Give JM the exit he likely wants, give MTL a minority shareholding (but a bridge into a full acquisition in time), and give CNR shareholders some hope that they will get better value than what is on the table today.

What if...

MTL increased their paper offer to 5 MTL shares per Condor (i.e. circa 35p), or 6 (i.e. circa 40p)?

At 5p I would accept 6 MTI for each Condor plus 10p, then keep the MTL shares to get the rest of the asset value through development. I would rather 6 shares than a meaningless CVR, irrespective of the notional 44p deal value (now 41p) previously quoted.

JM sold his Condor shares to MTL?

In other words bailed out leaving CNR with little or no cash left. How would that change the game?

In the red corner Calibre...

Working mine nearby, cash rich and able to turn the Condor resource into cash flow pretty quickly. Can afford to buy CNR (assets and/or company), but could reach a deal with JM. Could still go hostile on the company with more cash and a better paper offer. Risks looking foolish in letting a $1bn+ adjacent resource being lost to a competitor at a lowball offer.

And in the blue corner, MTL

Good cash flow at the moment, experienced team, but in clear need of a proven resource to keep the money tree alive. Have cut a personal deal with JM but can't really afford to put much cash on the table. It's not clear if they can afford to buy CNR and develop the mine. Also would take longer to produce cash flow. Not bad credentials but not in the Calibre league.

..and calibre is miffed that it could not buy the mine at a firesale price...

P (impolite reference to a derriere). I can't believe you can't use this word.

yep. he may well be on board with it. however, what you've got to ask yourself is how irrevocable it would be if calibre came in and made an offer for the company vs. the asset. calibre have talked about '...the potential acquisition of the la india gold asset...' jm may have an irrevocable agreement on the sale of (what exactly?). indeed, is the 'offer' being talked about for the mining assets or the listed entity. the rns talks about the asset vs. the company. my guess is that jm may have given undertakings regarding the assets, but i'm not clear at all whether this stretches to a situation where the company is on the block. suppose calibre launches a hostile offer for the whole company? where does that leave any 'irrevocable' undertakings re: assets of condor.

i think most people think it's condor in play because of the rns (which doesn't explicitly say that the offer relates to condor itself. just talks about an 'offer'). we are all inferring that it is an offer for the whole company from the way that mtl have phrased their own rns.

also, we don't have any sort of offer yet. the values quoted in the mtl rns are therefore a meaningless kite flying exercise. it has already dropped from 33p to 30p, and could drop (or increase) again by the time an offer is made.

the more i p**** the various statements the less clear it appears. all i know is that discussions are taking place with mtl, jm has cut a personal deal with them for either the mining assets or the his equity, that mtl have run some numbers on values which are already 10% down, and calibre is miffed that it could buy the mine at a firesale price. i also know that every other party who has expressed an interest in the past will be running their own numbers tonight, and tomorrow, to work out whether they could still have another go.

it's the beginning of the end for condor but i don't think we are there yet.

Agreed. That was my point. I'll value the offer at whatever the SP price is at the point shares change hands vs. a historical reference point.

I'm wondering whether I would be better off in MTI, but then again another offer could come out of the woodwork at any time.

Nothing prevents a third party launching a hostile takeover offer. Calibre had a go at getting the assets of the cheap but obviously couldn't reach an agreement. Nothing stops them having making an offer on the open market. MTI's initial offer is pretty limp at 30p plus a 'may never happen' contingent payout. It would not be hard to beat that given the advantages of getting hold of an adjacent mining resource. Indeed, there is a risk that they will look pretty foolish if they don't put something on the table, especially at the firesale prices currently being kicked around. I regard the CVR as a meaningless promise.

How do they get to 33p?

My calcs suggest 30p (cash plus MTI paper at market).

Https://www.condorgold.com/sites/default/files/news/Condor%20Gold%20-%20Leak%20announcement%20-%201.12.24.pdf

Condor Gold plc (AIM: CNR; TSX: COG) notes the press article released today and confirms that it has received two non-binding offers from Calibre Mining Corp (“Calibre”) (TSX: CXB; OTCQX: CXBMF) and Metals Exploration Plc (“Metals”) (AIM: MTL) which may lead to an offer for the entire issued and to be issued capital of Condor (“Possible Offer”).

The Company announced on 27 September 2024 that, in relation to an asset only sale of the Company’s La India Project in Nicaragua, the Company remained in discussion with a number of interested parties, both longer term and more recent, with several new parties having expressed an interest, been given access to the data room and indicating a wish to conduct site visits. The Company has now received two non-binding offers from Calibre and Metals with respect to a

Possible Offer.

There can be no certainty that any firm offer will be made, nor as to the terms on which any firm offer might be made.

In accordance with Rule 2.6(a) of the Code, Calibre and Metals are required, by no later than 5.00 p.m. on 29 December 2024, being 28 days after the date of this announcement, to either announce a firm intention to make an offer for Condor in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline may be extended with the consent of the Panel on Takeovers and Mergers (the "Panel") in accordance with Rule 2.6(c) of the Code. As a consequence of this announcement, an offer period has now commenced in respect of the Company in accordance with the rules of the Code and the attention of shareholders is drawn to the disclosure requirements of Rule 8 of the Code, which are summarised below.

etc.