OXR oxiana limited


  1. 707 Posts.
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    Over the last few days there has been the odd disgruntled comment and query about the oxr/mnr merger. There is some confusion as to why mnr is trading at below the initial equivalent merger value of $2.29 (ie 1.85:1.00 oxr [@$1.02] for mnr and a perceived value of $0.40 for the new shares in mnr exploration).
    The answer is that it is virtually a total scrip deal and cash (or some at least) is the preferred outcome of a merger or takeover. The deal is very dependent on the oxr price and therefore dependent on the Cu &/or the Au price. These are uncertainties and mnr will be discounted accordingly.

    However there is one thing for sure and that is oxr will work very hard to ensure that the oxr price will not slip unduly....within their control that is, unless they can fix the Cu &/or Au price which is unlikely. Be aware though that tipsters (eg Fat Prophets) and brokers place a value of around $0.80 on oxr. They however know stuff all and I can prove that.

    What does that mean to us? Be prepared for good exploration news around the decision dates of the merger and especially if oxr slips much below $1.00. How do we utilise this situation? Buggered if I know actually but oxr is on the options list and there may be an opportunity arising if oxr slips badly for a day or two. Buy a call with a near exercise date. Also the value of the oxr-mnr merger/mnr exploration split may well end up near the $2.29 (as desired by oxr) and that gives you about 11% on the physicals as already pointed out recently.

    With regard to oxr, it is a future medium sized producer with impressive exploration possibilities (the latest drill hole results quoted the last 6metres at 10.4g/t Au and the last metre at 27g/t.....what lies beneath that?). But for the fanciful $2.50 etc prices often thrown around it will be a long term buy. The principals are reputable: chairman Barry Cusak and ceo Owen Hegarty are both senior ex Rio people and if they say they have got it in the ground, then they have it in the ground.

    I have 40K oxr. Chicken crap I know but one has to have a punt doesn't one. Haven't got a clue what I'm going to do with them either. Maybe sell a put if the situation arises.
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Currently unlisted public company.

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