Passing thoughts
posted on
Mar 02, 2024 01:49PM
Combining Classic Mineral Exploration with State of the Art Technology
Our publicity over drilling could spur stock buying by mid-tier copper miners/explorers. If so, we may see volumes increase strongly beginning soon (and with related pressures on prices).
This is pretty common with "hot" properties having initial drilling by tiny companies like LBSR. US securities law allows other companies to acquire up to five percent of another company without disclosure, so we could begin to see that by one or more companies. In particular, I think Hudbay would be interested in doing this. They are already deeply involved in several projects in Southern Arizona.
Why would such as Hudbay want to do this? One reason is that if they can keep their name out of their acquiring up to five percent of the company, they can keep the cost down compared to what may happen to the price if their name is connected to buying shares.
The other reason is that if they want to acquire additional shares leading to a partnership or some other deal, their average cost will be lower for cheaply taking their first five percent.
Also, a mid-tier with the strength of Hudbay could eliminate our need to partner with or sell to a senior producer later.
Then, too, there is nothing to preclude two or more mid-tier companies from duking it out to acquire five percent each simultaneously before they eventually fall into a bidding war for a partnership or outright takeover. I've seen it before.
Let me also stress how rare it is for a company like LBSR to be drilling a target like Hay Mountain with but fifty million shares out. One who follows such things usually sees five to fifteen times this amount. It makes our shares more attractive to some, if only for psychological reasons.