possible takeover ?

From time to time some shareholders are speculating about a possible takeover of AIM. I would not exclude that this could happen in the near future but given the actual market environment I honestly doubt that this can and will happen. Somehow or other the main question is: What would be the value of the company ?

From a fundamental view I would say that a "fair" value could be around 5 to 7 cents per share. If you take in consideration the cash in the bank, the value of the equipment and existing infrastructure. You may add another few cents for the value of the zinc in the ground and some goodwill. So probably we are talking her of a range of 5 to 10 cents per share for a possible take over bid.

I personally have 4 scanarios regarding the future of AIM.

1) The financial crisis will last longer then expected (more then another 12-18 months), the economy does not recover and the recession will also last longer as everybody is hoping at the moment. Prices of commodities will fall further or will not recover substantially. AIM will not deliver further good drilling results (from Mumbwa). Then AIM will be broken within 2-3 years and we will not see our money again. Probability: 40 %, SP = 0 cents.
2) Scenario 1) but AIM will deliver some additional and really exciting drilling results. Then I could imagine that some could be interested to buy AIM on a relatively low level. Probability: 30 %, SP = somewhere between 5-7 cents.
3) The financial crisis will be over end of 2009, the economy recovers, commodities prices are recovering a part of their losses. Zinc price raises above break even, Perkoa starts to produce but no exciting drilling results from Mumbwa. Probality: 20 %, SP = 5-15 cents within 3-5 years. (depending from zinc price))
4) Scenario 3) but some additional really good drilling results can be delivered, positive feasibility study, then either possible take over or production through BHP and as a consequence a substantially higher SP on the long run (5-7 years). Probability: 10 %.

For somebody who is buying at 2 cents and has the chance to make 100 % in the short or medium term, this maybe is good news. For all the investors that have bought somewhere between 20 and 40 cents this is not really an exciting outlook. But maybe I am to pessimistic or my view is simply completely wrong.

Would be interesting to see other views regarding the “take over” fantasy or regarding the “fair value” of the company at this stage. Are there some “analysts” out there that may deliver some hard facts