HIGH-GRADE NI-CU-PT-PD-ZN-CR-AU-V-TI DISCOVERIES IN THE "RING OF FIRE"

NI 43-101 Update (September 2012): 11.1 Mt @ 1.68% Ni, 0.87% Cu, 0.89 gpt Pt and 3.09 gpt Pd and 0.18 gpt Au (Proven & Probable Reserves) / 8.9 Mt @ 1.10% Ni, 1.14% Cu, 1.16 gpt Pt and 3.49 gpt Pd and 0.30 gpt Au (Inferred Resource)

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Message: BHP’s War Room
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Would be interesting to be a fly on the wall of BHP’s war room now. IMO, they have several options:

 

  1. Walk off home run (SP > $3, either all cash or cash + BHP shares)
    BHP may have gained enough intel during the “discussions” to know Wyloo’s limit and may be willing to offer what they believe is enough to get over the 50% threshold.
  2. Go for the Hattrick ($0.55, $0.75, ???) (SP $1.50 - $2, either all cash or cash + BHP shares)
    IMO, this wouldn’t be enough to shut down Wyloo - I don’t think Wyloo’s offer to buy for $1.10 is based on an expectation of anything less than 100% return (>1000% is more likely) so I would expect Twiggy to come back with another incremental bid (even just +0.10?). 
  3. Go for the first down. (SP $1.20 - $1.50)
    Similar to #2, I doubt BHP would expect to win with an offer like this, but it would let everyone know they are still in the game, in anticipation of Twiggy following with an incremental bid, and a potential #4 play.
  4. Take their chances in OT (do nothing in the next 5 days)
    I’ve wondered about this option for a while as it would make things rather interesting. If BHP does not respond within 5 days, then I believe their offer expires. That would set the stage for the BOD to call a special shareholders meeting to vote on Wyloo’s offer. BHP could come back with a superior offer (technically anything greater than $1.10) just days before the vote. If the offer was high enough, it could result in a vote against Wyloo’s offer.  Might be a bit risky for BHP, but it would give them the satisfaction of causing Wyloo some consternation.

 

Of course, buried in all of the above is BHP’s (and Wyloo’s) resolve to win. A number of people have commented on the history and animosity between these to companies, so at some point, BHP, or even Wyloo, may decide to simply continue upping the bid beyond their own max in effort to make the other “overpay”. That said, IMO, we’re a long way away from overpaying for a mining district.

 

However you look at it, I doubt Wyloo’s $1.10 bid will be around for long.

 

GLTA,

 

Hobbit

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