Thanks for the summary. I'm going to add some comments below in bold.
mesa1 wrote: Spent most of today at the 2015 Sprott/Stansberry Natural Resource Symposium.
Some real luminaries with great insight spoke, including Robert Friedland, Rick Rule, Bill Bonner, Doug Casey. Sat in (more like evesdropped) during a couple of penetrating interviews between a couple of them and a media outlet. Inspirational big picture perspective. Definately a cup half full kinda day. We are truly in the perfect times for investing in the resource sector!
Also listened to Dev and Ross present, and managed a couple of private chats with them both before and after.
As many here know I was adamently and vocally against this DML merger scenario. Still am, but I have a better appreciation for the thought process, the many high-profile players polled before the decision was made, and what the current feelings are.
I can say there's a genuine humbleness with Dev at this point, and he made no bones about apologizing for the F-up that we have all endured as shareholders, and that he's getting alot of flack even from his family. Talk about pressure! He takes responsibility and of course we all know the deal is now definitive with no change to the terms. No choice really, given the $14M break fee. It wasn't through a lack of effort I sense. While there's resignation that now it's up to the shareholders, it's obvious that it's expected by all to be a NO vote - it will fail to attract the required 2/3 yes vote. Of course they are living up to the letter of the agreement, and support the deal, with management's 1% position in the company voting Yes. But it's only 1% - and won't be a factor.
A lot of money to go out on a limb with.... Not much in a takeover but, if it doesn't work out (which is looking more likely every day) you've pretty much emptied the company bank account, imagine raising money to pay this fee in August.
Personally I think with Dev's lack of getting adequate sleep lately, the stress, and the constant pace of being the guy to lead the parade, with Ross almost always at his side I might add, they earn every penny for their passion and energy. They truly belief in what is the deposit of a lifetime. These guys work hard! Dev's always smiling and available, answering every email personally, and taking countless calls and texts and attending a stream of meetings and social events daily ...
Yet they wanted to hand it over and dilute the carp out of it?
After getting my pressing Q's answered, my take away is that there's a genuine let down felt by FCU management for the lack of support that Denison has by the so-called institutional players. That was the biggest surprise following the announcement.
Ummm, anyone on this board could have told management that DML paper was garbage and no one wanted it. How could they not see that? I'm willing to give people the benefit of the doubt, but when they do moronic things that screams of bad idea it makes me pause. . .
But given the way it was structured, we now just have to wait for the vote. Nothing else to do. Unless Denison support starts becoming a real obvious factor, most everyone expects the NO vote to carry. And I don't think management feels any sense of disappointment should the NO carry, given the debacle we saw in the market. Yes, maybe a victim of terrible timing, but so it goes. With a NO vote there is NO break fee, although the legal costs could tally up to $700,000 at the end of the day.
The other really exciting take away for me are their private views on how the dimensions and the vectors of the zones are lining up. As Ross pointed out, they have a resource outlined of 105 million lbs from 4 drill programs, so it may be easiest to extrapolate. Last winter's program should add about the same proportionately, so we can safely assume 105/4 = another 26 million lbs, at least. Then there's the results so far from this summer's program. 150 million lbs is a foregone conclusion given what is safely known, and my impression is that this is just the start. 200, 300, ... this will end up a true world beater, and we will inevitably see a serious bidding war, and if it happens too early who knows, another spin out gets negotiated?
Again, if this was what we're looking at, why sink us with DML. It's just so weird.
The PEA is already underway, and will be cut off to include everything up to and including the winter program. Once out in September, ahead of the merger vote,a simple update to the PEA will be commissioned to include this summer's work.
There will be so much news flow over the next few months, and IMO so much additional value created, that these dark few weeks just endured will seem like a godsend to those with cash and the resolve to buy when shares go on sale ;-))
Again, hate to be repeating myself, but everything that is written here just screams of "why would you tie yourself to DML". It was just a dumb dumb idea.
Meanwhile, I suspect there are buyers today, or lurking, with a bid in mind. If the FCU share price leaves the sub-1.26 discount ratio and trades at a premium, you KNOW the decoupling has already started. At that point the deal is as good as dead, but it may signal another deal is imminent, requiring an even greater vote of 90% to pass. By then greed shall be more prevalent once again ... so no one's going to steal this THAT cheaply.