RE: 0.4p24 Mar 2022 13:39
SUZHOU WILL PAY £12M TO PREMIER AFRICAN MINERALS SHORTLY FOR 13% OF THE CO:
[1] Suzhou has already paid £1.2m.
[2] The balance to be paid shortly would give Suzhou 13% of PREM share issued at a
STRIKE PRICE OF 0.4pence which was a PREMIUM.
[3] The total will pay for drilling of Zulu lithium in Zimbabwe, studies and general co expenses.
-----IN THE INVESTMENT COMMUNITY, IT IS CALLED A "CATALYST" & DE-RISKING EVENT.---
RE-RATING:
This generally occurs and part of the investment playbook that re-rating happens:
[1] De-risking event eg Atlantic Lithium was selling at 20p region when news of Piedmont's JV was RNS'ed.
As this de-risking event was factored into by the market, the Atlantic shares began to re-rate or rise upon a FINANCIAL DE-RISKING. The shares rose to 42.8p region. However, I have to look after this as someone on this forum said that their JORC has been upgraded to some 30.1Mt from the 20Mt region. I have to look whether there is the usual re-rating immediately so it will also be like the last time of taking a short time?
AVZ had a cornerstone investors in addition to Suzhou and again the shares re-rated given the total investment was A$30m inc. institutions.
Without Suzhou, the PREM Zulu Lithium project would have lacked funds just like Atlantic, AVZ, also lithium projects in Ghana & DRC.
However, it remains to be seen whether the market will also follow the usual playbook set by the investment community.
For the avoidance of doubt, I am not in any group but am cognisant that broker reports
all cite "CATALYST/S" & "DE-RISKING EVENTS" in their evaluation of companies in mining and exploration.
Will the PREM shares go to 0.4p which Souzou paid ? That is up to the market and whether
some or few see there is a "MIS-PRICING" or not. Suzhou would have had investment banker s to calculate what is known as "FAIR VALUE" based on a set of financial criterias, one of which the price of lithium spod is struck at. Hence, why many lithium co's shares have risen with the price of lithium . Why? As Colin Bird said, it is a play as an OPTION into the mineral?
RNS'ed
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