Personally I would rather get to a point of construction and then see a merger with Wolf.
Is offer good or bad?
I never understood at the time what the panic was amongst a lot of Wolf shareholders, the same as I don't now. When you buy into a junior miner like this, you are buying into a prospect and one that is going to require a lot of money, skill and tenacity to turn into something that is going to make money. That money is going to come from an awful lot of debt or an awful lot of shares, if it is the form if debt, the annal operating profits of the company once in production is going to be severely depleted by debt repayments and servicing costs. If it comes from new shares, the annual profits are going to be higher (I.e. a bigger total dividend) but it has to be shared among more people. There is no such thing as a free lunch.
From the answer given, there will be NO dilution of Ormondes shares as a result of this deal. However Ormondes wholly owned subsidary (Solaro) is being partially sold to Oaktree to enable the development of Barrucapardo. That means the profits will be split between Oaktree and Ormonde. But your 1 share in Ormonde will still be the same tomorrow.
So from the answer to question 2, oaktree will not be taking any shares in Ormonde as part of the deal, they are taking a majority holding in the peoject, NOT the company, in other words Barruecopardo has become a Joint Venture between Ormonde and Oaktree.
£50-80 million to open a mine of this size, it has to come from somewhere. If it comes from equity, thats reflects to give a better NPV, but conseqently everyone gets a smaller shareholding. there is always going to be major dilution in a project like this. If anyone doesn't realise that, they perhaps need to question whether they should be investing in junior miners....
I trust this company and its BOD.. It has all gone to plan so far. Financing should not be a problem given the asset they have secured. All in good time. I hope news comes as soon as January be great. Strong Buy.
30% price increase, pre-trade, could this be a good day?
Exactly Billain, let's keep this realistic here, shares are sold for various reasons. ORM assets remain the same, an in my opinion a trustworthy pro-active BOD. So focus on that and in a few years time ORM will be producing one of the most valuable metals by the 1000s ton.
I just gave ORM a BUY rating: Big buys and permission .. Will I be right? [link]