Only good news?I'm usually a bit of a bear when I set my own expectations on these things, and I'm definitely no expert, but I'm trying to find where the negatives are with this announcement of the Letter of Intent to sell Cehegin in the way they've announced, and I can't see too many:
- Mineworx is getting $20 million when they were getting nothing before, which, if it materializes in the form of cash, gives Mineworx a great bit of revenue to use finishing up the Davis recycling production facility.
- the mystery buyers of Cehegin must be someone with actual mining interest and with enough of it that they're putting in $20 million-worth of skin in the game.
- the drilling program and Spanish government regulatory approvals for the mining part of the operation must be getting somewhere, or else how would the $20 million AND the "newco" listing be worth the hassle.
- Mineworx shareholders should see an appreciation in MWX share price at least inclusive of the $20 million revenue which is a first for MWX in a long, long time, as well as a continuing piece of the pie for what Cehegin will become, for which I think $20 million is only the tip of the iceberg.
The "negative" bits are:
- missed timeline for the drilling program completion...we're almost double the time further along than originally hoped without an update on the completion and drilling results. HOWEVER, I imagine that in order to built a base-price for "newco" it might be a deliberate strategy to make those kinds of news releases once "newco" is official. I'm not wise enough myself to know whether that's wise, but maybe so.
- related to the missed timeline, a continuing absence of NI 43-101 confirming the mining asset estimations
- while the update that "newco" work is continuing, the revelation also adds further delay, time needed for due diligence to be completed by the new owner and all related regulatory hurdles and listing on stock exchange
I am curious about the muted response on the volume this Tuesday, when US markets re-opened. I'm guessing the uncertainty of the "newco" share structure as well as the new owner (partner?) has something to with it. If the new owner is a big name, this would fly, but not knowing, I imagine the market is just biding its time.
When I first read the news, I thought "What, this whole thing is only worth $20 million"? The more I re-read it and digested, it feels like "Someone's willing to pay $20 million to be first in line and then still giving us a piece of the pie for the privilege".
Hopefully others with more insight can elaborate.