Alpha Minerals Inc ESOFD

Lets stop the bickering

[jandd]

This has been an exceptional board to date and let's all keep it that way.

Last time I posted I stated that I "saw" 100mm lbs which at $10/LB gave a billion dollar project value or $500 mil apiece for AMW and FCU. That works out to about $16 per fully diluted Alpha share and $2.90 per fd FCU share. Now, in light of what has traspired thus far in the current summer program,  I "see" 150 mm lbs which works out to about $24 per fully diluted Alpha share (31.4 mm shares fd) I wont sell my shares for less than $24 - plain and simple. We also have to keep in mind that there is a possibility that there could be 200 mm + lbs and this project really has a chance in challenging Cigar lake or even McArthur River for ulitimate supremacy.

I took an AMW  position on the day of the discovery in early Nov at 50 cents and have been adding to my position ever since. At $4.00, I chose to double down so to speak. I am chin deep that for sure. I chose to have about 75% AMW and 25% FCU, but then I sold all my FCU when the ratio went to 5:1 since I felt that AMW was simply being too undervalued by the markets.

I choose to mainly hold AMW becasue I always much preferred thier management style, I really like the way they handled the bidding war with Hathor and  I really like the way they have properly managed the AMW share structure since the discovery.

The ratio should be about 5.55 to 1, you have to look at Enterprise value and not market cap: Enterprise value takes the market cap and then subtracts the cash on hand to get a valuation, and fully diluted Alpha has considerably more cash than Fission - remember the $5 warrants that AMW issued with thier last $4.00 round?

Raymond James in thier latest report also uses the 5.55 ratio in both their previous and revised estimates.

So why on earth would an Alpha shareholder take a discounted ratio of only 5.3 and only receive 2 seats on the board?? That is ridiculous and it seems to be an opportunistic and somewhat desperate attempt by Dev. Furthermore - he should not have gone public with this in house quarrel. We all know that consolidation is inevitable, but to bring this public is disctracting and again seems desperate.

I see Dev as the smooth talking promoter type who is typical of the all the dudes walking around Howe street. - thier egos are all huge and Dev realizes that once operatorship moves over to AMW he will move to the sidelines and become somewhat irrelevant. Also, from my prospective, he is the person we least need moving this project forward - we need the 2 Ainsworths and Gunning from AMW and we need McElroy and Ray Ashley from FCU... Maybe as a symbolic gesture offer Dev the presidency, but that is about it.

Dev in suggesting that they control the deposit going forward and his comments about not caring about Ainsowrhts feelings show poor judgement and possibly reveal his true colors. I mean were it not for the last minute discovery hole he would have given this project to Lucas Lundin and Dennison - and he sold other FIS assets at quite the discount when you realize that Rio paid way more per in sutu Roughrider lb that Dev reaized from Dennison.. (The lundin's always come out ahead so this story is not over yet..)

I also know for a fact that operatorship moving forward deserves a premium albiet a small one. A proper merger ratio would be about 5.65 IMHO, and there is no reason on earth to only allow Alpha 2 seats on the board. I would even OK a 5.5 ratio and a merger of equals so long as Alpha controls have the board of the combined company and so long as Gunning can overlook the auction process and not Dev.

I also would echo sentiments that Alpha wants to see how many pounds are in the ground whereas Dev is in the pockets of the Investmenet bankers who will sell out early so long as they get their 55% premium. I feel strongly that the current project upside is much more than 55% so, as Alpha shareholders, we want to see how big this deposit really is and are not interested in the "give it to me now/instant gratificiation" if a 55% premium at this point in time. This is also why I feel strongly that we need to ensure that the Alpha team has an equal say moving forward and I better trust them to ensure that we dont sell out too early..Really, my biggest worry about this project moving forward is that the entire project will probably be snuffed out before we see how big it really is.


Then there is the street side of this whole deal which definitely sides with Dev. These boys want the quick profit if it on the table, and they much prefer a loosy goosy share sturcutre such as FCU's since they can better short, hedge, attract the instututions and the index funds - Better liquidity is what the street wants - definitley. That said, the streets biggest obstacle is shareholders like myslef who are holding Alpha tightly and I will vote no to any merger that again does not properly address:
1) the controlorship premium
2) the ridculous discount in the first propsoal
3) Equal control by Alpha and Fission of the newly combined entity.

So - like it or not anyone - I do suggest that you read this over and understand the reality of the situation.

Moving forward, other ways to realize good value for this project would be for AMW or FCU to do a 10% dilution to a senior that they trust. This would allow us to keep on drilling the project - it would place a few warts on the future bidding process, but managemnet has plenty of paper so any qould be suitor would have to appese Sprott, pinetree and management as well. They could also possibly look at combining with DML since as DML share hodlers we would still participate in the upside of the project...

Good luck to all AMW and FCU shareholders. The bottom line is that we will all make more money here regardless of what transpires... AND - we get to vote on any merger proposal!!

Jandd

[$tarbuxxonPender]

Anything to do with a merger with DML is a non starter`.

[bridgetonowhere]

@jandd - So basically I disagree with almost everything you've written.  Like quite a number of posts I've read, there seems to be a misunderstanding of FCU's offer.  Since FCU and AMW are 50/50 joint owners, the 6% premium was intended to bring AMW's share price up to the same market trading multiple as FCU trades for.  If AMW had been trading at a 3% market

[jandd]

Bridgetonowhere Hey - we can always agree to disagree, and you make some valid points... Re the young Ainsworth - I totally agree that he need not particularly be a board member and his best contribution would be on the gound. But I still instist that Alpha have equal representation on the board, and I would rather have young Garrett Ainsworth as a director than Dev - from a standpoint of

[leverage1971]

Bridge you missed his most salient point This is ultimately about a buyout by a major and so who do you want leading that Dev or Gunning? FCU's only real issue at this point will be do you have the stones to fend off a major until the completion of the winter program as it seems every SH other than the bankers want this property drilled further before offers are seriously entertained. It

[losecash]

Bridge why are you siding with the bankers ? Why do you choose management that would sell pls prematurely? Are you a banker ? The more I think about this I believe it's the bankers and possibly one of the big boys trying to get Dev to put a bow on this and get it to them before the true scope of uranium is discovered. There are probably several people that stand to get a prize if this happens