ROI is irrelevantAs the saying goes: when there is smoke, there's fire.
I suspect that ROI (return on investment) for these guys is irrelevant. Namely because the amount of small $ being injected is in return for large amounts of ownership.
Ka An and the mysterious (likely Chinese) private placement yields nearly 50% control of company and it is done for pennies.
Whereas, buying the assets (if they are valued between conservative $130-$250 million USD), is clearly more expensive. For argument sake, the entire force behind Ka An could be the butt-hurt Hebei shareholders who said "WTF, why buy for $225 million when we could try a cheaper alternative?"
Furthermore, if the amount of $ in the ground well exceeds the price paid for ownership of the company, then clearly this is a good bargain. If the forecasted sales of the platinum will well exceed the expenses paid for ownership of the company, then it is an even better bargain.
All that is left is the expenses involved to get the two mines up and running which are not production ready. Depending on those costs (and the forecasted profits from the platinum), it may not be too much of a financial expenditure. Though, we'd have to see figures as to the suspected costs for such process.
So, at this point, what is to stop more ownership of the company being divvied out to unknown owners...?
And, if the case here is NOT "let's make a return on our money" but "Let's get assets for really cheap, mine it, and make our money from selling platinum" ... you can be assured it will be everyone BUT the majority holders who get fisted.
Zero guidance issued concerning why there was a private placement. Usually that is included cuz, well, you know, it's sorta relevant especially if it's dilluting shares or causing share price depreciation.
Zero guidance issued concerning the asset vote (or consequences). Zero guidance concerning what the forward plan is. Zero guidance on anything, in fact. Either it's done strategically or it is because it's not necessary for them. And, by "them", I mean Ka An and who ever else shows up and starts buying large blocks as we just witnessed. They likely already "know" what the plan is, so who cares about the rest. Whether this lends itself to collusion or sketchy dealings... not sure it matters at this point.
I will speak to the compliance and disclosure analyst at the TSX today to address my concern but I am under the impression that it is too late/irrelevant.
Furthermore, if more options are to be issued it is either to new people who will soon join, OR, (and someone please confirm), they simply readjust the ones issued at $1.05 and lower the price of them (is this possible?).
Let's not get too hung up on the price at which Ka An owns it because if it's simply a play for ownership, they may as well continue to pursue this avenue with what appears to be affiliates, sell more shares, and then just buy them back to potentially make the move to going private.
So, let's go back to the opening sentence....
If we currently sit at .60c as of right now... is it worth selling at these prices? Or, is it worth risking the potential downside (as now demonstrated via a PP @ depreciated prices) and being right about the speculation of it happening. Do you feel it's worth being stubborn about the prospect of these assets being sold? You'd have to be very confident that everyone is lining their ducks up to get a great ROI - but I just presented an argument to the contrary which should be considered.
Does the risk:reward even bode well in this scenario? The premise of owning this company because they have assets valued well above the current price does not mean a thing in such scenario.
Please consider and comment.