Hope this is helpful. It's just my opinion based on what I think the chart is suggesting. This is always a balance of probabilities so my opinion can be wrong and other analysts may have differing views.
Proactive Investors' One2One Mining Forum are organising a presentation which is taking place on Thursday 16th November at The Chesterfield Mayfair Hotel from 6pm. Presenting on the evening will be Berkeley Energia (LON:BKY), Central Asia Metals (LON:CAML), Hummingbird Resources (LON:HUM) & Mkango Resources (LON:MKA).
Central Asia Metals (LON:CAML - Market Cap: £276 Million)
Central Asia Metals owns 100% of the Kounrad SX-EW copper project in central Kazakhstan. The company's proposed acquisition of Lynx Resources is also expected to complete this year.
The combination of CAML and Lynx is expected to provide commodity, geographic and operational diversification which should enable the group to remain well positioned throughout the commodity cycle.
Management will be on hand to speak with investors and provide more details on the rationale of the transaction.
You can register on this link (maybe need to cut/paste):
Originally I thought that the movement in the sp was related to the takeover and how it was being seen by the markets. However, when I plot the sp against the sector index over the past 12 months it just seems that the movement is just reflecting the sector movement over the period from the initial suspension to now. It will be interesting to see if CAML can continue to outperform the index in the coming months (see 3 month chart).
A bit of a formality but clears the way for the Lynx acquisition to take place over the next month or two.
Synergies should give a little saving for the amalgamation of two low-cost, high-divi companies, but I think that continuity is the key here.
Kounrad has a defined life expectancy and Copper Bay, while a viable project, will be much higher cost to run and is one to keep until copper prices improve. I have high hopes for Shuak in due course.
Lynx acquisition gives the reassurance of multiple income streams while transition between different projects occurs - it seems extremely prudent to me. I am sure that the company had been looking for other value copper sites but has decided that if nothing appears to offer sufficient value then diversifying gives a better RoI.
The trade data I see on IG indicates that we opened today at 245/249 bid/ask, which correspond to my number 2 price option. However, It seems that a lot of investors are dumping their shares, so the price has now dropped to 225/227 (a 11% drop from the suspension price) indicating that the takeover is not seen in too positive a light.
Hopefully the price will stabilise soon, and we can see it moving in the opposite direction!
Just checked my e-mails ( I'm to busy messing with this share lark )
And see i was invited to take part in the fund raise by Cornhill Capital must of been early yesterday before i rang the lead broker i referred to in previous post.
The way I read this is that the placing price is effectively 236.5p, so this is the baseline for the future. Maybe more like 240p on the trading day.
I've never experienced this before, but I assume that you will be able to trade the dividend bearing shares for a few days, then go XD, then the new shares feed into the market and the total number of shares issued......
This is a well underwritten issue. Investors clearly like it.
Onward and upward......
My only concern is the governance environment in Macedonia and Kazakhstan. This must be a very real business risk.
1. The remaining shares that were not sold and are in the market could drop to the same price as the shares CAML sold, i.e. 230 + 6.5 dividend = 236.5p.
2. The price averages out between the old price (at suspension) and the new disposal price (230), in proportion to the number of shares in each group. I estimate this to be between 244.5p and 248.5 depending how one deals with the dividend.
3. The MCap of CAML is increased by £298m (US$402.5) to £580.4m, which when divided by the number of shares (160.7m) gives 361p.
What happens after the opening will depend on how the markets perceive the takeover.
At least we do not have to wait long to find out. I am hoping for something closer to 3. above, but being an eternal pessimist, I suspect it will be closer to 1.
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