RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Just Out Maybe a misinterpted clause d) on page 36 re: Termination payment
It reads d) If Reservoir or Nevsun if the Arrangement Resolution shall have failed to obtain Reservoir Shareholder Approval at the Meeting or if the completion of the Arrangement has not taken place by the Outside Date....
end of quote
But even if the termination payment does not kick in as you say, a strong legal issue remains on the table, with the regards to the Red Dragon unsolicited proposals.
Reservoir needs funding. Needs to repay NSU financial loan. NSU has advanced other monies as well. I believe its a million thus far.
Reservoir needs to fulfil their obligation to Freeport - re: exploration costs on South Side - estimated at around $20 million
How can Reservoir, turn around, and tap in to the proposed Red Dragon, financing and stock purchases, if the proposal was made during the time the NSU offer was on the table?
I think a strong legal case can be made in those circumstances. That is why I believe that the bottom line is the real position of Reservoir management and Board. If its genuine they will not tap in to the Red Dragon proposal.
They can seek out alternatives, but according to them, none were superior to what NSU offered.
Thus the pressure remains on Reservoir and their lack of financial power and mining expertise. I believe the appreciation of the stock was in great part to the infusion of $135 million procured from NSU. It made Reservoir stronger as it capitalized in getting 100% of Timok north.
Do you really believe that management and the board of Reservoir is as low as the Red Dragon tactics?
I don't think so. I could be wrong but I don't think that management and the board want to lose control to the Red Dragon and I don't think that Sprott, Black Rock etc are excited either.
We'll find out tomorrow. But its too simplistic to think that Reservoir picks up 100% of the property and then stiff NSU when the latter owns rougly 16% of the company.
If there's an alternative proposal it has to be one superior to NSU's.
Somehow I doubt that anybody else will come forward and the merger with NSU will go ahead without further dilution to NSU shareholders as the proposal on the table incorporated already a 50% dilution and there's no way that NSU will part away with their cash.
271