It is the weekend and the traffic seems to have died so I put forward a few opinions of my own.
Who says NOT has to merge with FWR?
FWR share holders are given a premium for their shares, if that is not satisfactory then they do not tender and we go our separate ways.
Why all this dribble about some spectacular news that NOT has to do something to increase it's share price.
It does not, because it is not written in stone that this merger has to happen.
It is an opportunity for both companies to form a stronger and a more viable company. If some share holders of these companies do not believe this to be so or do not want to, then it is their choice and their peril.
I say peril, because both will have to do something to grow and I do not mean just resource wise. All the companies in the Ring of Fire need to partner up in some fashion sooner or later. And it is better sooner because with a larger company investment capital come easier for that necessary exploration and then development. The area will not progress without cohesion needed to create the necessary infrastructure that will not come cheaply. So join up or be swallowed up.
At the risk of making a nuisance of myself for repeating - This is not a buyout nor a takeout, it is a merger. Characterizing it as the former is prejudicing the action.
Noront and Freewest do not need to be the first to start the consolidation.
The recent agreement regarding rights plans is not capitulation by one or the other, they settled sensibly, probably to avoid legal costs. FWR wins because their plan is not removed outright and NOT wins because the plan will be removed eventually, there must have been some validity to the protest.
The consequence is that with the plan in place on the 18th, the offer falls by the way side or Noront extends the dead line past Dec.1.
The other side of the issue is that FWR possibly has someone considering a merger or a buyout and the announcement on that is expected before Dec.1?
Chromite price predictions for 2010 or even 2011 mean little because no chromite will be produced out of the Ring of Fire in those years. More valid years like five or more from now are too far distant to predict the price, hence the very subject is highly hypothetical.
In essence the RofF does not revolve around chromite despite some attempts to make it appear as such.
However it does revolve about the sum of all the metals to be found there and we should give proper due to the other metals.
In summary:
FWR sells you hope and potential. Hope that their precious metals become a resource, that there will be a counter offer from Cliff's or someone bigger and a well mannered management team that provides little to improve shareholder value. These are the problems with a small company.
Noront however offers not only potential but a bigger company, multi-metal resource, plenty of cash for further exploration, and finally a multi-experienced cut throat management team. These are the benefits of a somewhat larger company.
Seriously and objectively consider the potential of them merged.
Good luck to all of both companies. Ed.
