My viewIt couldn't be more clear by the low volume, tepid reaction to this amazing news how bad the market is for juniors right now. Easily the worst I've seen in my career, easily the worst since the PM bull started in 2000, likely the worst since Bre-X. But SDRG has its money (at least it will when the deal closes), and a new beginning is commencing.
$12 million will be in the bank with only about $2.5 million of capex requirements for China this year and next to nothing for Mexico, so the money can be used for a lot of things such as commencing production in China and Mexico and adding the "layers of mgt" noted in the earlier press release. Marc is essentially starting over from scratch, better off asset and cash wise than nearly all the juniors and with a reasonably manageable share count just over 100 million and no reason/need to raise equity any time soon.
Clearly, the Chinese are comfortable with the story, and in my view have chosen to use SDRG as their "shell" for creating value in the Erbaohuo properties and whatever other projects they aim to acquire in the next few years. The vote of confidence in the company is as strong as can be, which is why I find it laughable how anyone can sell at $0.17 when the Chinese are paying $0.24.
Marc clearly has a lot of company building to do, but with all the new cash and dramatically less responsibility for China (the Chinese will clearly take over operations and the majority of spending), he will find it a lot easier to do so.
Sorry sellers, the stock has seen its lows. Time to start buying again.
yoyo
P.S. Where's the post of the moron saying Erbaohuo is not a good property? They will make great money there, and by the way if there is a lot of magnesium god bless them, it's worth a lot!