RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Nevsun Dismisses Baseless CriticismsThese are valid points. a few observations:
-the dissident shareholders have no credibility, if they really want this project then they should make a better offer, say a $12 per share cash bid or something. If they view RMC as such great value why didn't they buy more shares on the open market so they can get more vote?
-if RMC management believes that a "NO" vote would generate more risk adjusted value down the road, they wouldn't have issued the June 7th and June 13th release to urge shareholders to support the deal... they simply could have said nothing. If they felt either a "yes" or "no" would generate similar risk adjusted return down the road, again, they simply could have issued no release to "urge" the shareholders. Based on how the management have created value for us over the years, we know they're savvy and understands how to create shareholder value, there is no reason to doubt their recommendation at this point.
-NSU management has shown that they are capable at building mines and allocating capital (they returned capital back to their shareholders instead of buying marginal projects and waited patiently for years to buy a world class project like Timok) The geopolitical risk is annoying but their stock has kind of priced that in already, and if they do get Timok, we can expect a re-rating of the share price.
A few points of potential upside on NSU:
- they are ready to produce zinc as the zinc price has been going up nicely and zinc is expected to be in supply deficit while copper is still in a down trend.
- it is in the process of proving up a VMS district, very good exploration upside around BISHA
- Joe Mazumdar from Exploration Insights has commented that given what we know now and everything else being equal, the BISHA district should be more valuable than TIMOK.
I think if we can get good political stability (in serbia/eritia), the combined company can be build into a great mid tier mining company and will generate better risk adjusted return for us RMC holders. A No vote should still work out fine for us but it might take much longer for the value to be realized and the short term could be painful and dilutive.