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Ann: Revised Terms on Corporate Transaction with ERM Power, page-44

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31/10/14

11:39

Post #: 14214755
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Originally posted by jake0002 ↑

Yep.
there is simply NO comparison between the current board and mgt, and that of the previous mob.
NO comparison whatsoever.

S/h also need to remember that in this current proposal to purchase the ERM O&G assets in WA, just WHO is taking the biggest risk???

It's not us ---- it's ERM!

In return for selling its hard assets into EGO, ERM has to provide an interest-free loan of about $15m, and has to provide $7.5m equity in EGO. Its further "reward" is the Top-up facility! ie more equity in EGO.

So it seems to me that ERM is taking most of the risk here.
If EGO does not perform, ERM has its equity at risk ( in far greater qty than us), PLUS it has a $15m loan to EGO which would be worth SFA if EGO gets into trouble. If the wells EGO propose to drill with the funds it raises simply do not hit hydrocarbons, then ERM (and us) are stuffed.

IMHO, the business plan of this board seems to make sense.
This proposal simply provides EGO with the ability of a quantum leap in growth, access to funding which it simply would not have access to, and a REAL business plan for growth. Under the previous board, we simply would NEVER have seen this outcome of a documented way forward. All we ever got was rehashed maps of the WA coastline, with lists of drill prospects - then CR after CR.

The unresolved questions I have relate to the fact that ERM end up with 19.99%, and that we have an open-ended liability in that Top-up Facility.
And these questions really are an issue of pricing. We simply do not YET have the information to assess.

BUT we need to wait for the KPMG IER to before we make up our minds.

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Hi Jake, I really don't think they have an option as they also want to see a return on their investment & let's not forget if we vote yes & end up in a position where the company cannot pay down the debt then ERM get all of the assets & tenements by default. Is that a huge risk for the price they will receive them for? I think either way it is a win/win for ERM!

EPW Price at posting: $1.78 Sentiment: None Disclosure: Unspecified

EGO Price at posting: 0.6¢ Sentiment: Hold Disclosure: Held
2 Upvote

0 Great analysis

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Ann: Revised Terms on Corporate Transaction with ERM Power, page-44

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History-making uranium sample grades and an imminent drill run. Infini Resources is poised to transform in 2025

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This biotech stock raised $11M in a risk-off environment. Its Alzheimer's drug could change the game

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