Ann: Trading Halt-GXY.AX, page-470

I'm coming round to the merger thing.
I can't find any big companies in trading halts to completely justify an immediate 3rd party take-over, or any GXY acquisitions that would have necessitated GMM going into TH.

If a GXY/GMM merger facilitates SDV finance and keeps SDV profits all in-house, without needing further equity sell-off, then it saves money in the long run by dealing with dilution now, rather than diluting SDV or wasting time waiting for our profits to mount up.

GXY could then consolidate to remove too many moving parts and the increased volatility.

'Cept as a GMM holder I would like 2:1. Yep. Most definitely.
1:1 would be theft. 1:1.5 is just what the recent market manipulation of both shares has served up.
There is no cash to sweeten and the other assets (gold etc) do not seem to even factor into GMM's valuation right now. Add them to the pile of things they bring with them.
Huge part of this is experience. Fotios has the background to be the best manager of a hard-rock operation in Australia. Remember - no other Australian company has done this before.

To compare GMM to GXY you have to look at earnings per share to see the true correlation of their values.
GMM was going to actually out-perform GXY by double on earning per share all the way up to and including base rate SDV.
They would only fall behind when SDV got scaled up. This has to be taken into account - that GMM holders have missed out on a lot of value by being knocked out now to help fund SDV instead of James Bay.

So with 622m more shares for GMM holders - GXY ends up with approx 1.9b shares.
A 50% increase. For twice the profitability of its hard-rock operations and 20-30% more for its brine.
Retaining this 100% of SDV's future profits seems to be the most important rationale for this merger, to me.

Selling 20-30% of SDV to a 3rd party before scaling it up was always going to benefit the financier. Cha-ching. It was always a bonanza.
That 3rd party had to be on board with reinvestment of profit into more capacity or it was just never going to work.
GXY didn't even need that financier after the first year of profits came in. Perhaps this "bad deal" with GMM just saves them from a very much worse one with someone else.

Its a bit of short-term pain but that 30% extra of SDV is already worth hundreds of millions to our NPV.

Definitely can see the major upside to keeping all the profits and assets under the same roof.
But at 1:1 - no chance will GMM vote for it.

Lets see what happens tomorrow.