BUYOUT price has to be higher than $ 500 million (right now)I am of the opinion that NILI has been approached by a MAJOR and next week after the PDAC conference, I am expecting that there will be many interested parties surrounding NILI.
Management has a fiduciary responsability to its shareholders and this involves not selling at a price that is inferior to fair market value.
The current fair market value of NILI (as of today) without further drilling can be easily established.
Industry peers trade between $ 75 per lithium ton to $ 125 per lithium ton.
We trade at $ 9 to $ 10 per lithium ton. It means that any offer has to come between $ 75 per lithium ton and $ 125 per lithium ton, otherwise lawsuit from shareholders.
Management is smart enough to know what the market value is.
Right now it is about $ 500 million based on 4.7 million tons of lithium in situ valued at approximately $ 100 per lithium ton.
Will the MAJOR risk having the fair market value soar 4x as more of the NILI land is drilled or, are they just going to bid fair market value and close the deal. That is the unknown. So any deal is $ 2.50 to $ 3.00 per share, right now.
Usually deals of this kind take 6 to 9 months to close. I experienced it in another stock where company did not divulge that they were in buyout conditions. We kept getting indirect hints.
One big hint was the cleaning up of the balance sheet. Hence giving up 57% of the options by insiders and agreeing to it, tells me that something bigger is in the works. Also any new buyer wants clean financials.
So looks like a MAJOR is doing some due diligence on NILI.
Lets see if any other hints drop.
Next week we will be flooded with interest from other parties.
It will be difficult to get to the PEA as one bidder will outbid the other.
Good position to be in.
Enjoy the ride to NEW HIGHS.
Good Luck,