we bought it at the correct price for now, because
- aussie junior miner (base and gold metals) market is horrendous
- aussie mining industry in fear due to apparent china 'slowdown'
- german owners back in germany is in biz of developing mining projects and bit off more than they can chew going into the bad market, and needed quick exit from anything so as to ... get this ... get on w/ a tungsten mine :0)
- aussie juniors and intermediaries have difficulties connecting w/ china players of right sizes if not allotted plenty of lead time; and forget about the info channel between germans and chinese juniors
- china companies, after all these years, is still unfamiliar w/ aussie juniors
- australian junior sellers are suspicious of dealing w/ china companies because of the slow decision cycle of china state companies, and elongated deal cycle due to aussie govt approval cycle, and would grab cash in hand prospect first, at least for now
but, the news is getting around australia that china buyers pay top dollar 3-4x for aussie claims, and even so, such would still allow china buyers to make plenty of money, especially as compared to trying to engage w/ same claims in china
conclusion: cross border info arbitrage and value arbitrage factors all in context of a illiquid market existing in fear, and we stepped into the gap w/ cash and brand-name geologist leader personality
bottom line, we may have lucked out :0)
p.s. the local management believes hq made a mistake and should have leverage up the gold company to generate cash needed for the tungsten deal as opposed to selling the gold company
as napoleon supposedly said, never ever interrupt your counterparty when he is making a mistake |
