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I don't see why the share price should be bound by 13.5, provided there is a probability for the rejection of the TO. Just for clarity, assume the gold price is 2500. Probability of "NO" vote would be close to 100%. Why on earth would the price of Shanta stay below 13.5 in such case?
Mathematically, Current Price = (13.65 * Probability(YES vote) + implied market price * Probability(NO Vote)). You can apply an individual discount factor for 2 months of waiting.
Of course, probabilities above depend on the price, as the price signals voting intentions.
If the current price is, say, 14.0, and you believe it will go to 25-30 in this cycle, would you vote for 13.5 TO? You can sell shares immediately for 14.0. It would not change anything regarding voting, because the buyer would not vote for the offer either. Going higher than 13.5 would signify alternative equilibrium in game theory.
Please note that even Lombard has not given an irrevocable undertaking. They gave a letter of intent, which is non-binding. Would Lombard vote for the offer if the market price is much higher than 13.5?
Adw198
It may be on the contrary. Once it gets to the offer price or higher, chances for the take out to get voted through drop to virtually zero. So the share price will advance further, breaking the 13.65 ceiling and setting a completely new game.
Pedro61 is filtered. I don't know why you waste time on the guy promoting tiny illiquid stock.
Tornadotony
I am pretty sure you hold quite a few shares. And you would probably be OK to get more, below 13.0. It is good to find things we do not know. The problem is that most likely, your information cannot be trusted. Sorry for being direct.
This is a classic information campaign operation. You have a "good" guy (Tornadotony), who published valuable supportive information for a week or so, earning trust. Once trust is earned, a knowledgeable accomplice (mrtibbles) joins the play, with the reference to the analyst who uncovered bad things in the past. Tornadotony adds credibility to the guy. Like mrtibbles said, "Obviously everyone will make their own decisions on whom to trust and whether to stay or get out."
I see a subtle orchestrated campaign to sow the seeds of doubt and kick people out of their shares from Tornadotony and mrtibbles. Some respectable analysts will confide to us that Shanta reporting is a scam, that NL LOM is not extendable, that Singida is unscalable (despite geological evidence and ease of doubling the production), disputes with the Tanzanian government, etc. Be careful whom you trust on this board.
I think the share price will be higher than 13.5 long before the voting commences (beginning of January is likely). Main reason is game theory - once we break through 13.5, the "NO" vote is essentially guaranteed, and the share price will follow its natural laws. There is also a high probability for better offers, which is not priced in.
Why is the price so low now? Main reason is that some people assumed 13.5p TO is a done deal, and are moving money to the other gold stocks in anticipation of the seasonal Chinese NY rally. I think that is an unwise thinking. The reward-to-risk is much higher in SHG at the moment, for the reasons I explained earlier.
Indeed, it is difficult to reconcile Erik's bullishness during the year (as well as doubling Singida production and a super-pit ideas) and his support of the TO offer. A conspiracy theorist in me suggests maybe it is not as straightforward as it looks. Either Erik's hands were twisted last moment, or else. What else? It could be a multi-step plan, with a low ball offer coming first, and a more attractive offer(s) (not necessarily from ETC Holdings) later.
Whatever is behind the curtain, I maxed out my Shanta holding. And I'll buy more below 13.0. At the moment, this is an amazing opportunity with zero risk.
Thanks Tony. I think the realisation will gradually set in that 75% vote for 13.5p will not be happening. The resentment will grow, amplified by (likely) decisive break-through of the gold price through the all time high in the traditional January rally. And then I can easily see the stock price breaking through 13.5p. If any entity tries to short it, it would be to their ruin.
And yes, we must force the management to publish drill and Q4 results before the vote.
No one will vote "YES" if gold is above 2100 at the time of voting, and we have all the craziness of 2020 again. As I explained earlier, Shanta is an ideal investment with 13.65p price floor and unlimited upside. Do your thinking, people.
Effectively, one has no upside limit, and a floor at 13.65. I will go all-in with my LSE allocation, once I see a good opportunity to liquidate my other holdings, provided I can still get it at 13.0.
The higher the price of gold, the more probable for the good bids to arrive. It is highly improbable to lose in this game:
1) If the gold price goes lower, you get 13.65p.
2) If the gold price goes higher, you get better bids, or you get immediate stock appreciation after the "NO" vote.
The only scenario when you lose is higher gold price, no other bids, and 75% "YES" vote. Extremely unlikely. Would anyone vote "YES" if gold is at 2300?
Our first major request is for a timeline that is sufficient to receive evidence of price discovery. >> Tony, is there a way to extend the timeline?
You can destroy your reputation only once. :)
Don't worry, guys. We have all the trump cards. It is our company, and we will make them pay if they want it. :)
Around 7% of SHG shares were traded yesterday. I am pretty sure at least half of them will vote against the 13.5p offer. Big players and M&A arb guys see the opportunity to have a free lunch of 13 -> 13.65 arb and, ideally, squeeze ETC Holdings into a higher offer.
I think ETC Holdings realise they will not get 75% votes with a 13.5 offer. Then why did they come with the offer so low? I think it is all about psychology. The human brain is wired to compare. If you come up with a 13.5p, and then raise it to, say, 16p, then it would look as attractive as offering 25p from the start. I think those who are selling now are making a grave mistake. Of course, there are gambling opportunities in other stocks. But here we have 13.65 floor in two months, with a highly probable upside option, for free.
"Gold miners" can be roughly divided into 3 categories: explorers, developers and producers. I guess 1755 looked at the first two categories. Only producers are making money. Of course, it can be a mixed bag. For example, Shanta is a producer for NL and Singida, and explorer for WK.
Second point is that one should be careful with AISC extrapolations. For example, if HUM management screws up, as they usually do, their AISC for Q4 could be north of 2000. That's probably a reason they did 30% dilution a couple of days ago. :) CIG will now have 43% of HUM, so they are primed for a hostile takeover. Risk is everything.
Don't forget that both CEY and HUM are now hedging their gold production (not sure about the others from the list), so they would not participate in any possible upside in the gold price. Shanta is not hedging.
Toptiger, sorry, I cannot share the names, as I am still accumulating. One problem is these stocks are quite illiquid now, most being under 200M market cap. It takes a lot of time to get a decent exposure if you don't want to cross insane spread. At this point, SHG is my largest position, and it will probably stay like that for some time.