The announcement clearly says that post the initial 90 day due diligence period and after the formal agreement is in place, there is a 30 day period for ROS to purchase the initial 10% interest for US$14M. Thereafter the Company can acquire at US$1.4M per 1% up to 70%.
ROS has control of the project and timing of additional percentages in the project from this point in time. Now Smith raised well over the $4.5M in only three weeks on that Moose Pasture in the Pilbara - what do you think he can do on a world class project?
Remember he does not get his 10M performance shares by raising capital at less than 50 cents. He will not be issuing any shares for anything less than $1. Once they get the JORC statement out along with the confirmation on the metallurgical test work (remember Ross Nairn is a processing expert and has just come from a similar sized Copper project at the ex Citadel's Saudi operation purchased by Barrack Gold for more than US$7B) there will be dozens of commodity trading houses fighting for off-take agreements on the Copper concentrate. Smith will simply exchange this for a large convertible note to fund everything. No shareholder meeting required except on the conversion to equity much further down the track.
Once again I don't believe that Red Oct will be the ultimate developer. Robert Friedlands Ivanhoe is active in Kazakhstan and Robert is the biggest Copper Bull in the world at present. Somehow I think Smith will be happy to except an on-market bid.
ROS Price at posting:
31.0¢ Sentiment: Hold Disclosure: Held
