I have just read through the BDO report and I can't decide whether to subscribe to the SPP or not.... it's a real line ball.
Firstly I must say thanks to MOL for sending that to us, it is the only decent piece of paper they have sent in the last 6 months - and there has been a lot!
After reading through it there just seems to be more downside than upside to to the deal.
BDO actually state they don't think the deal is fair to shareholders. They say it's 'reasonable' but only fair if the Hanlong financing actually falls over in Jun 2010... but I can't see that as fair either as that would make the MOL share price dive.
I must say we have in my mind poor directors running our company, I think they could have found a much better deal that what Hanlong have put up.
In the long term I fear that Hanlong will use Moly just as a vehicle for their bigger mining empire and not actually try to make the company profitable or care to distribute any dividends... and our directors will just be fat pocket puppets nodding their head along the way.
The other thing is BDO don't forecast any major increasing in the Moly price over the coming years so at current prices is the mine even going to make a profit? Hanlong just need the metal so they will dig it up even if it costs more than it's worth... they don't give a stuff about Moly Mines profits.
Does anyone have other forecasts for Moly prices over the next few years?
I will continue to ponder over the wkend and make a call on Sunday night whether to stump up some cash for the SPP.... but definitely won't go for full allotment.
MOL Price at posting:
87.5¢ Sentiment: None Disclosure: Held
