RE: RE: Could it beAs all of you surely have, I've given this a lot of thought today. Honestly, given the large stakes by three-four investment companies plus management, I don't think it would be a purchase offer. The large stakeholders know what this company is worth, which is why they're here in the first place, and I would be very surprised if they would sell much below the NPV of Largo accounting for all the properties. What's CA worth right now, for example? Who knows, but it sure looks good. Not good grounds to sell for cheap and not enough evidence to buy at a fair price based on what we've seen. For us to get a good value compared to where we'll be in 5 years time, the purchase price would have to be a huge leap from where we are now and I imagine our institutional backers would say the same.
So, no buyout - and I don't think that's bad news - leaves us with two options:
1) Installation license - Doubtful that the halt is just for this.
2) No installation license - If they had released this news today, perhaps. Although it could still be no license, renegotiated financing terms on that basis.
3) Installation + Financing - Pretty likely.
4) Northern Dancer joint venture deal - Also quite possible, although given the timing I assume it's the installation and financing. Tungsten prices are robust and not dropping like other commodities, there is scarcity, Chinese control, and essentially the perfect storm for tungsten right now.
If it's 3, I would expect us to be in the 60 cent range (though I'd expect us to currently be in the 40 cent range and here we are at 26 cents). If it's 4, it would depend on the terms of the deal. Disadvantage is that we'd lose a good share of equity in the mine that we could have kept if Maracas was contributing cash full steam. Advantage is that we have a several year head start, which is huge in NPV calculations), we'd be closer to having some serious income, and Northern Dancer is not even credited as being worth a penny as an asset until the current share price is above $1. This announcement could at least shoot us into the $1.25-$1.50 range in the short term but that's a WAG. Obviously that's not even valuing Maracas and ND fully but show me something in this market that is.
Between LGO, GWG, and WPX, I think I have an interesting week ahead of me next week...hopefully in a very good way.