Mercator Minerals Ltd MLKKF

RE: undervalued

[24~Karat]

In the final analysis, the free and open market price is what prevails, and everything else is conjecture. The current market price for TYS is at a 68% premium to the pre-announcement price, which is double the normal 30% to 35% market premium that Jennings has cited as historical precedent. All you have to do is to look at yesterday’s newspapers for proof of similar premiums. Freeport-McMoRan paid a 33% premium to acquire Phelps Dodge. Freeport said at the time that it expected the deal would be accretive to the combined company’s earnings per share and that it would cash flow immediately, and indeed it has. In contrast, ML’s offer to purchase TYS is not only not accretive, it is 25% dilutive to cash flow. According to the most recent Jennings report, the project will require an expenditure of $799 million, and many years of effort, to earn an $80 million return beginning in 2013. ML has some unique capabilities that could accelerate that 2013 date cited by Jennings by two years. That is a hugely important because, the “sweet spot” in high commodity prices, many analysts believe, will begin to flatten out or decelerate during the 2013 - 2015 time frame. As such, other potential bidders will have to factor in lower commodity prices, in order to even justify making a bid. All pompous rhetoric on the TYS board about it being worth multiples of its current market prices is an hallucination. The truth of the matter is, not one of them actually believes in their own delusions. And here is the proof: On the very day the offer was announced, TYS traded down 4% to 71 cents before it was halted, and not one of them was there to lend support the price. But why? If there existed such a certainty that the stock had a $3.00 or $4.00 value, then anyone in their right mind would have mortgaged the hereafter to pick it up at a mere 71 cents. Right?