Originally posted by timmayd
I think that this may be a last attempt by RMS to pick EXU up on the 4:1 offer.
I'm finding it hard to articulate the politics of how I see it playing out, but I'll give it a shot:
Dangling some cash and then taking it away may unsettle a few investors and thus upping their holdings in EXU and giving them more control. As most investors prefer cash it'seasy to see why a strategy like this may be effective. Ongoing delays (which I attribute to distractions) doesn't help.
Reading between the lines it appears the only reason why they couldn't make it work is because they want to truck or along the interstate - in line with commentary around the need for dirt to process at EM. A slight tweak in strategy could give them 1.5mines with 7+ years of revenue.
I attended the RMS and EXU AGM’s yesterday. The body language in both rooms was that the deal was off. However the ALK transaction GM will be delayed until late December and the RMS original offer is still on the table. The only upside for RMS not withdrawing the offer is the potential to return shares acquired after a “defeating event”. I had a good chat with the EXU CFO and he said it was not a forgone conclusion that I would have my EXU shares signed over to RMS returned. I do not fully understand how this will work?
I do not believe that the trucking ore issue cited is a real one. RMS commented upon trucking ore from the Marda Deposit (similar grade deposit to Tampia) at the AGM- “this is bread and butter stuff for us”. RMS understand trucking ore and do it well and have done so for a long time. They also are excellent miners. Hitting guidance 19 out of the last 21 quarters (the 2 misses were also minor) is impressive form.
I do not think we have heard the last from RMS. I still believe in a risk/ reward sense the merger is very sensible.
Re Mace, the forecasts at the AGM ranged from 30,000 to 100,000 ounces. One of the bullish investors was a geologist. We will find out next week.
Whether RMS come out with a reduced sweetener after next week’s announcements will be an interesting scenario? I truly do not believe the game is over.
