News: MLM Melior Announces Merger With ASX Listed Metallica Minerals Ltd, page-59

Firstly, it is also my understanding that RIO is blocking access the the haul road. But the situation is very vague...

Regarding the merger I do not think there is a consensus here. I got invested in MLM because of the bauxite and did not mind that they sold SCONI although they sold it a bit too cheaply. The bauxite was a very nice and simple project and they should have been producing by the end of 2017..... OK then early 2018 after the end of the wet season.... Then came the haul road story..... But still this thing remains interesting because it can be brought to production quickly and would be a very nice earner. SP should go to well above 10c when they get it going.

And now they come with Melior. Clearly with a much more complex project but near to completion. Should be producing in November (if all goes well). Bad part about it is that Melior has a significant debt and we may end up paying for it....

Now if it really works out and production starts in November and we get the haul road approved and get the bauxite going beginning 2019 the SP will go up very very nicely.

Now we know that MLM can really not be trusted to get anything going, at least not in the last 2 years. And seems Melior also has had significant problems getting their mine going. Seems that there were 3 failed attempts. So why should it work out now with our "magic" MLM skills?

Also what I find a bit strange is that they can start the mining in November but cash-flow positive only in Q2 next year? What happens until then? We have to pump money into the mine first?

Clearly I would have felt much better about this deal if our Bauxite "mine" would be up and running and we would have used the cash from that to fund this merger and the mine. Would have been a great growth process. But now with both mines not yet generating any cash this is a very risky move IMHO. It is clear what Melior "wins" in this deal, access to our money. Not clear what we win except a lot of additional risk.

So I would vote for postponing this deal until the haul road issue is resolved and we are finally moving on with our bauxite project. Once that is "all clear" we can do a deal with Melior and then even on much better terms. Believe the current terms do not fairly reflect the "risks" we as MLM shareholders are taking. To my understanding Melior is basically bankrupt and unable to raise cash. And thus we are their cash-cow. But we are not nearly getting enough for taking the large risk of "investing" in Melior. Just look at the lithium financing of PLS and AJM. Their financiers get 15% interest. What do we get for the 6m$ of dept Melior brings to the table?

So anyway, I think my opinion is clear. I am against the deal. In particular at the given time (our bauxite project not up and running so why start a "next" project). Secondly I think the fact that we bring the money to the table has not been "rewarded" enough in this deal.