Carabella Res Ltd Nsw CBLLF

RE:Cash and stock buyout by Pala Investments of KBLT

[lumpy13]

So looking at this a bit more closely, Pala will keep the C$200m of physical cobalt and the Voisey Bay cobalt stream, which KBLT originally paid $300m (C$400) a year ago.  

Current shareholders receive cash roughly equivalent to the pre-offer stock price (C$3.57 cash vs C$3.50 stock price yesterday).  But it should be noted that the stock price had fallen in recent months while the price of cobalt was rising.  Current shareholders primary interest - going forward as Nickel 28 - will be the 9% interest in Ramu, as well as some other relatively insignificant streams and royalties.  

All-in-all, the premium for the KBLT shareholders is the Ramu interest, which Pala and KBLT mgmt estimate is worth C$2.18  (which is equivalent to 60% of the pre-acquisition stock price!)

Quite simply, Pala makes out like a bandit as they can liquidate the physical cobalt and keep the very valuable Voisey Bay stream, for a mere fraction of what it cost a year ago.  Current shareholders are getting screwed as they will be taken out quite cheaply.

For those that don't know, the head of Pala is the KBLT's CEO's brother.