Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
S32 (mkt cap ($17.3M) and SFR (mkt cap $2.8M) are likely bidders for the Khoemacau copper mine located in Botswanna. The mooted sale price is >$2B. Given SFR's mkt cap and gearing relative to that of S32, isn't it unlikely that SFR will win this auction.
Hi John,
There are a number of moving parts to this equation, obviously S32 is over 6x larger than SFR but the latter could always raise money in this hot EV facing space depending on its appetite for the mine which in our opinion is likely to be high considering it already has a mine in the region, it’s just the size that you rightly point out that could be an issue. While it’s not out of the question for SFR, we suspect that S32 is the more likely buyer and the share price is telling us that, with S32 unable to rally in the last move higher for resources, implying the market believes an equity raise is a strong possibility.
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