re: Ann: Matsa Acquires Halls Creek Project I... I’m totally...

re: Ann: Matsa Acquires Halls Creek Project I... I’m totally perplexed by this convoluted transaction (particularly after reading through the BNR thread). From what I can establish;

- MAT has spent ~$1m accumulating a +20% holding in BNR (and possibly much more following the recent corporate machinations)
- MAT will invest a further $1.1m to purchase a 49% equity stake in BNR’s gold project (assuming PANs shares are liquid assets)
- MAT will have an expenditure obligation of a further $3m to earn up to a 75% interest in the project

Based on BNR’s headline of $4.4m for the transaction, this effectively values the project at $5.8m which is a significant premium over BNR's current market cap of just over $1m. So why doesn’t MAT just bid for BNR (particularly when its shares were trading at much higher levels) and preserve its cash. I’m no corporate finance guru, but from my perspective an all-scrip takeover by MAT would deliver a far smarter outcome; outright ownership of the project, more available working capital, no risky shareholder approvals, an attractive exit for BNR’s shareholders and no ongoing requirement to financially support a listed shell.

Assuming a scrip offer was made based on the $5.8m transaction valuation and with 128m BNR shares on issue, this would equate to 4.5c/share, a tidy +400% premium on BNR’s last traded share price which, combined with MATs +20% blocking stake, will in all probability deliver a successful outcome to MAT. Life can sometimes be so simple.