A very interesting question which I think requires "best" and "worst" case scenarios applied.
"BEST"
CHM receives the balance of $20M from the previous $25M agreement - I believe those funds would be payable in April 2012.
CHM pursues and receives settlement of $50M from Grimaldi (I believe highly unlikely). Timeframe could be very lengthy anyway.
Remaining options are exercised before expiry - $1.83M payable to CHM upon exercise. There are a total of 40M options on issue - 25M strike price of 6c and 15M strike price of 2.2c.
Litigation funder pays $850K + damages to CHM - I have assumed damages of $1M but no timeframe.
CHM gold assets are added in with the revalued sum of $8.4M. That may be a rather opportunistic valuation since I am unaware of any existing JORC code gold resources be they measured or otherwise.
Assume all of the above comes good the total shares on issue (assuming conversion of options) would be slightly over 530M.
The total of cash assets + gold valuation = $86.8M = about 16 cents per share. Timeframe difficult to specify.
"WORST CASE"
This would imply zero fund recovery from Grimaldi but all other funds agreed and banked. I will leave the gold asset valuation as expressed by the company. Assume options are not exercised although it is almost certain that the 15M with a strike price of 2.2c will be exercised.
$36.8M = 7.5 cents per share.
I think the "worst case" outcome is better to follow since Grimaldi will I believe prove extremely difficult and assumes he has funds that are extractable as opposed to stashed away in some unaccessible foreign account!!
Neither model makes any reference to "new resource projects" that will be vended into CHM. This is a highly likely outcome which has been expressed in the company PP dated 13/02.
Now only time will tell how this long haul battle will finally unravel but I would suggest a significantly higher share price in second half of 2012.
CHM Price at posting:
10.2¢ Sentiment: LT Buy Disclosure: Held
