This transaction has been a long time in the making and has cleared the path for Minbos to accelerate the development of their high grade Cacata Phosphate Project. The merger will streamline the decision making process regarding the preferred development option for the Cacata Project (study due 1Q17), as well as makes future negotiations regarding financing and offtake much simpler.
In a show of support for the transaction the company's major shareholder exercised $3.8m worth of options. With 310m options outstanding (1c exercisable before the end of 2016), and Petril being given the same rights as the option holders as part of the merger, Minbos could have more than $14m in cash by 1Q17 if all rights are exercised. This could see Minbos fully funded through to the completion of the BFS, as well as having a significant portion of funds required for Cacata's development.
Valuation: We value Minbos at $0.031 / share (share price $0.008 / share). We applied a 40% risk weighting discount to our valuation given the current stage of development, however will reduce this discount at the completion of the option study (1Q17) and subsequent BFS.
