I've been having fun with guessing that this is a larger take-over from a 3rd party on the GXY thread - but I just can't seem to find any big fish who are also in a trading halt.
Perhaps some big fish don't even pause before they eat a smaller fish - in which case its still a live possibility, that GXY and GMM have received a take-over bid.
Likely candidates : US or Chinese big boys.
Control transactions/take-overs are essentially the same thing. Its just GXY mentions acquisition and we don't.
SO...
Lets run with the GMM take-over by GXY. Royal pain in the a$$ for us who have run the numbers and can see the value here as the leanest and meanest lithium-producing company in the world right now.
But... we are so undervalued and languish a little from low volume, making us easy prey for anybody with a few bucks to throw at shorting us. We have been having a tough time of it for the last month or so getting battered by the swings.
And now we must likely deal with the fact that Fotios and Tse have probably shook hands on the alternative financial route to SDV - which involves shoring up the books and co-opting GMM's share of Mt Cattlin profits.
Since the combined income of Mt Cattlin after production costs will reach $100m or so very soon, the combined entity could possibly do without selling further equity in SDV, just bank finance - which it will find easier to get after reforming as a single entity.
This way GXY dilutes sideways adding GMM to gain an immediate extra $50m of bill-paying power and an orderly roll out of the assets, SDV first - then James Bay.
Tse runs SDV and Fotios runs Mt Cattlin and James Bay.
I'd always hoped GMM would get in on SDV - but I had hoped that it was as a JV.
Perhaps the deal was just too good for GMM though. And neither company have large amounts of cash right now. The iron is oh so hot now. This is one way to move faster and stronger.
Still - I would like 2:1 for my GMM shares.
1:1 is theft. and 1:1.5 is just what the market is offering right now, after being manipulated. We were halted in the middle of what felt like staggering back to the 70s. We would be passing $1.00 as soon as things settled down and we were hitting all our production targets.
I don't see GXY having cash to add a sweetener to the merge - unless they're paying us out with GMM's own money. So our compensation should be 2:1.
Then, hopefully GXY consolidates down from the resulting 1.9b shares into something more reasonable or the resulting entity will get out of hand.
But perhaps even that period will not last long.
The resulting power-house will attract a new 3rd party bidding war and this merger may simply be cleaning of the house for the next step - a big bid for the entire entity.
Management may already have had nod that there are very specific buyers waiting.
They've just been in Vegas and we were the talk of the town.
Good luck to all holders.
This may be the General's last battle but I don't think any of us "longs" are going to lose the war.
GMM Price at posting:
61.5¢ Sentiment: Buy Disclosure: Held
