Sounds like a few people here know a lot about drilling, either in the industry or more time to study than me. I am happy to accept that the final resource may be higher than stated here, and understand the statistical undersampling. This still leaves a number of questions for EXU though, rather than further discussion or blame on RMS. If you want to see EXU price go up you need to convince investors it is a buy at this price.
1. Why did they not adapt their process to cope with the grainy nature of the gold?
2. Surely if the sampling showed such statistical variance then there is also a chance that the resource is also going to increase or even remain. It was only classed as inferred afterall? I just remember another another company I looked at a while ago that had some great drilling with near surface, visible gold grains, and an inferred resource, that eventually did not amount to reserves.
3. I see some strange comments still that EXU does not need to prove a resource and should just start mining, that they will be mining gold and profitable in 2019. How are can EXU have any chance at funding or even a bankable feasibility study without establishing reserves? Will this be able to be done with the money from ALK given that must also fund the company, staff and directors for the next 12 months?
I also think that RMS understood all of the drilling sampling issues yet still did not think it was worth their increased offer. I reject that it was anything to do with trucking the ore to EM, because they said quite clearly they would evaluate the trucking option vs constructing a plant. Even if it was economical only to construct a new mill on site then they would have proceeded with their increased offer if it would still generate value for shareholders.
Since RMS has the cash to build a plant without further financing costs and could produce gold sooner, RMS would would calculate a higher value for Mace than it is presently to EXU and ALK when you take into account funding costs and time to production. So if there is so much potential, why would an experienced mining company not find it worth an extra 5c? This is an experienced and successful management team so it deserves a reasonable answer not a conspiracy theory.
Final comments regarding some saying RMS are acting deliberately to take advantage of EXU or shareholders. This offer has been going a long time now and EXU have had plenty of time to sort themselves out and produce better than this. RMS are also not the management that triggered the defeating conditions. EXU are responsible for this by doing a deal that deliberately triggered defeating conditions. The RMS offer was unconditional apart from these defeating conditions which were rather standard for a takeover offer. Have you ever seen an unconditional takeover offer that allows the target to continue to issue shares and options free for all? If anything EXU were the ones who should have made this clear for their shareholders since they were advising not to accept.
In general though it shows how important it is to read and fully understand all investment decisions like this, and usually advantage in such offers to wait until close to the final acceptance date to respond, allowing for changes in market.
I caught up on some reading from EXU, as I said I am watching to see if it is worth an investment in the future when this rolls over. Something others may want to consider is the latest Hartleys report summary. Not that am saying they are reliable, but they are consistent and it was favourable enough to go on the EXU website. They value EXU with the ALK offer at 15c in 12 months, and value RMS at 60c in 12 months without including any synergies between RMS and EXU operations. The difference is under the RMS offer EXU was a buy, and under the ALK offer it is only a speculative buy, because the value is dependent on further drilling and financing and on the whole carries a lot more risk than going with RMS.
The perceived risk for further drilling and financing options for EXU is why I am not close to a buy at this price, I would wait and see if the current support holds or it tests 64c, or someone shows me a viable financing option that results in less dilution or finance costs than going with RMS.
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