slow drip in share priceSince it is painful to see the slow drip in share price, and I have way too much time on my hands right now, I will address the "what can go wrong" items from previous post and why I don't think is a good idea to sell at these prices.
1) Mine plan does not match IMC off-take requirements
The mine is what it is. Can't make up what is not there. Previous management may have tried to use old "historical" drillings to inflate resources and this may be the real reason they were taken out. New assessment has more drillings and provides values of proven resources. Loss of uncertainty in the end is necessary to proceed, even if it leads to lower expectations.
With some financial tools and looking at the old feasibility study for costs, scaled down to high grade resource and new mine plan (which can be guessed from bits and pieces of info already), the NPV of the mine can be derived, based on current and expected APT prices over 10 year life. Sure they are going to dewater the mine and go down dip eventually, where there is /maybe lots more stuff, but that is not how financing is done (proven resources, CAPEX, O&M costs, going and expected prices - and that's it). The "new mine" NPV is not 400 M, which was the "large mine" value calculated at $400 APT. But it is a lot more than 15 M (today's market value). I think IMC has good reasons to continue its interest in ownership and off take deals.
2) Dundee wants out of the investment
Is Dundee losing interest? Goodman's companies are not doing too well these days with the crash in commodities, but the guy is diversified and very clever, so he should not be in too much trouble and will be back. The obvious questions are then: why allow the company to run on fumes? Are they going to "rescue" the company with a placement and take them down the stretch? Why haven't they done it yet? Are they going to let it fail - and hand it to IMC?
Dundee has invested a lot of money in this venture. Their average SP is over 20c and after taking control of the board they probably have been aiming all along to sweep in now at a much lower price. Thanks to the thin and volatile CSE market (50% SP drop in one month on less than 1% float traded), they may now get a chance to do a 4M placement at 5c, This will average down their shares to a bit over 10c and take them to 30% undiluted ownership (over 40% when fully diluted). I would take the chance. And none of the Goodman's directors are stepping down on Dec.15 (including Ned's son).
3) APT price nosedives on account of bad world economy.
APT price has dropped 20 % in less than a year (380-310), on multiple fears the global economy is slowing down and China is going to lift tungsten export quotas. Oil prices have dropped a lot and will drop more on account of the price war between US and Saudi for market share. Typically oil is the last commodity to crash, because the world runs on oil, and cheap oil is what finally is needed for new growth. China will in fact lift tungsten quotas (which were largely ineffective anyway due to smuggling), but they are likely to impose an export tax on the product, which is very smart way to curb smuggling and bring in revenues. I think prices will stabilize next year. This mine has low power and water costs, reasonable labor and possible government subsidies, so it should a low-cost producer. Besides, IMC is next door (not quite but close enough) and Koreans like to buy Korean.