GREY:LYDIF - Post by User
Post by
Chileanmafiaon Nov 18, 2018 8:11am
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Post# 28990871
Most Likely Scenario - SOLD AT A DISCOUNT?
Most Likely Scenario - SOLD AT A DISCOUNT?I suspect that the most likely scenario for LYD going forward will be that the project will be sold at a deep discount.
Reasons that support a Sale:
1. The lenders have given management additional time to remedy the situation - but Mgt has not been successful. (A sale would allow them to extract some value).
2. The Board has also changed gears with individuals who have experience in selling projects. (This obviously supports the sale decision).
3. The recent cash burn (millions of dollars wasted) which has resulted from the poor decision to keep staff while the project was idle - has become the kiss of death for shareholders. (With no revenues and little cash on hand - there are few options remaining and perhaps the best option is to put the project in more capable hands - someone with deep pockets and experience in dealing with high-risk situations)
4. At this time Mgt figures they need about $100 million to complete the project - (money will be very hard to come by for LYD due to the current crisis).
A sale may be the only positive outcome for shareholders. Perhaps if the company is sold to a company like IAMGOLD, LUNDIN, KINROSS, B2GOLD or OCEANIA in a cash and share deal then with these new shares LYD shareholders might see some value in years to come.