Ann: Havilah-BHP Kalkaroo Alliance To End, page-48

@doubledeckerdog @TheSpaniard

Other than OZL/BHP, no one has entertained narrowing the gap between price (MC) and value (NPV).

Copper hitting US$10,000/tonne and BHP’s bid for AA could unleash the copper bulls.

Agree that Kalkaroo would be a good fit for SFR (MC $4.2B). It still has an office in Perth, is a proven developer and is sitting on $141M of tax losses it cannot use. The rehabilitation liability of $30M for the DeGrussa copper-gold mine will add to these tax losses.

Other potential suitors recently reportedly looking for assets include:

MAC (MC $ 1.4B): missed out on Northparkes copper-gold mine in NSW to EVN and this week was rumoured to be considering Glencore’s Mt Isa Mines operation. Its Cobar mine in NSW is c. 550 kms from HAV’s SA projects. However, MAC seems to be linked to brownfield projects rather than greenfield.

RMS (MC $2.3B): missed out on Karora gold assets in WA to WGX for $1.2B. Perth-based RMS was previously based in Adelaide and would be familiar with HAV’s assets. BHP’s mining inventory at Kalkaroo of 2.1M oz of gold puts it among the top 20 gold deposits in Australia. Whether RMS is interested in diversifying into other metals as EVN has done is unclear.

EVN (MC $8.0B) and S32 (MC $15.3B) would be logical fits, although they seem to be linked to larger brownfield projects.

That said, the KCO has 2 weeks to go before expiry. IMO based on BDO’s IER data, Kalkaroo would currently be worth > twice the KCO potential total consideration of $405M. What do they say about ‘gift horses’?

If Deutsche Bank can’t find a buyer by then, it seems HAV has a new metals document it can distribute to prospects interested in potentially acquiring its assets.

If interested, the abovenamed listed companies in particular could do a scrip deal for HAV which would allow HAV shareholders to participate in the potential upside. If a prospective buyer is only interested in HAV’s metal assets, the Fe and U assets could be spun off as part of any deal either to existing shareholders or by a potential acquirer.

It ain’t over until the fat lady sings.

DYOR