Originally posted by Jongerd
Frustration at the Sconi sale outcome is understandable but more from a MC rather than a share price comparison. Prior to the Sconi acquisition AUZ had a market capital around $24m, is now at MC of $92m after falling from over $300m and would seem to have management (less well paid than ours?) that gives some confidence for MC recovery to previous highs. MLM current MC is $10m.
The suspicion lurks that more
diligence might could have improved the outcome as the EV revolution was being foreshadowed for some time prior to the Sconi deal - but who knows? "Hindsight is notably cleverer than foresight", so the saying goes.
Unfortunately, diligence also comes into question with the protracted delay in start-up of Urquhart Bauxite causing many shareholders to abandon ship. Many of the SH remaining are frustrated as we have a marketable resource sitting idle, and may be amenable to new blood being injected to the BOD?
@Jongerd there has been heavy dilution in AUZ register, so neither the use of SP or MC should be used... Since the original deal the AUZ share register has swollen from 2,139M share to 3,382M shares (+ rights), this is a 58% increase in shares (and MC) - I understand part of this was the deal itself, but it shouldn't go unsaid...
2016: 1,171 million shares on issue
2017: 2,139 million shares on issue
2018: 2,677 million shares on issue
Current: 2,715 million shares on issue + 667 million rights to SKI
(Total 3.382 million shares)
Time will tell, but AUZ have no cash and are still yet to plough millions of dollars into their projects to get them up and running... The exorbitant highs the AUZ SP hit were ridiculous - $300M for some material sitting in the ground, a material that although we have predictions, we do not know what the supply and demand equation will look like, a material that needs to be refined using techniques that are not proven yet... I mean I love a solid aussie company leading the way, like AUZ are, but they have huge huge hurdles to try and overcome to get the project up and running... and until such time that they either do it, or end up like the 95% of other aspiring resource companies and go into liquidation - you cannot make an assessment on the deal...
I mean AUZ are spending over A$4M a quarter in trying to bring this project into fruition, literally burning A$4M a quarter - and good luck to them... How do you think MLM would have achieved the same outcome with only A$6M in the bank? With huge dilution and a possible partner... It made good business sense for MLM to sell their interest and focus on trying to become a cash flow positive junior miner...
In 5yrs time it'll be cool to reflect on these business deals... All the best peoples!
