I don't think we'll know for sure what is being considered re deals for Nemegosenda until there is a deal announced...
While you can speculate across the entire range of potentials that are possible, and doing that might be useful, or at least entertaining, I'd start by thinking the things the company has said are likely meaningful...
SRSR has pointed out they have recently carved Nio-Star out in a way that allows Nio-Star to do deals, or become a "stand-alone" business. In discussing the deal done with Dahlman, SRSR pretty clearly stated that the deal with Dahlman was focused on realizing the value in the Nemegosenda property, and that we could expect that deal would still leave SRSR free to work their other interests themselves. Of course, that might easily have changed... but, I've not seen anything to suggest it has... unless you read the last PR as suggesting that ? Even if the relationship with Dahlman has changed and expanded... I still think Nio-Star will be most useful to everyone as its own project.
Even if there has been change, I expect those two things... Nio-Star having a name, and the announced focus of the Dahlman deal... should reasonably constrain what you should expect will be happening re Nemegosenda...
It is possible, but, I doubt Nemegosenda will be split up... rather than remain a complete package in terms of its holdings and its association with Nio-Star. Still doesn't mean Nio-Star couldn't do a limited development deal on a portion of the property. If there is any real division of the property, I'd expect that the diamond prospects might be carved out... and, otherwise, keeping it tied all together in one package makes more sense.
It seems there is obvious consensus that Nio-Star is likely to become an independently trading standalone... probably through a RM into a shell, that will give Nio-Star its own capacity to finance its future operations... and that is likely to be trading on an exchange other than the pinks. I still think doing a RM into a TSX trading shell is most likely. Or, it is also possible that a "spin out" of Nio-Star will occur, while the JV is done in yet another, entirely different entity... even a new company formed... with Dahlman leading the IPO, etc.
The real questions for SRSR holders re a deal with Nio-Star, I think, are about the scope and scale of what we ought to be expecting to occur in a deal. A JV is obviously likely, but, there is a lot of variation possible in terms of %'s and $$$.
I think there is a bias here on the list, that tends to err on the side of thinking small. I'm obviously part of that, have been an advocate for erring in that direction, and have been consistent in lobbying for doing more "small money" deals that will tend to expand the value much, much more than is lost in %, rather than "big money" deals that will be "big" at the cost of a much larger % before the value has been fleshed out.
So, given I've limited my expression of an opinion to that which is based on what is known, I think that means there are two things useful to consider...
One, perhaps obvious, is that you probably won't have brought Dahlman on board only to support effort in doing small money deals. I'm OK with that, too, as the "value" in the deals done is still all about the sequence of events... %, $$$ and timing. I'm not posturing as pretending to teach them about that. I'm not an advocate of doing "small money" deals "instead" of "big money" deals... rather than an advocate of doing "small money" deals "before" doing "big money" deals.
The other, also obvious... is that we don't know everything the company and Dahlman do. That is true in at least two areas in which we know the company has been working on making long term progress: exploration, and audited financials.
On the exploration side: We appear to agree that they've been constrained in what they can say by non-disclosure agreements, recently. The market assumption appears to be that the non-disclosure issues are about negotiations related to "financing deals". While I expect that is likely true, I also see plenty of indicators that there is also more that is known about the property than we've been shown.
I found the handling of reporting on the last couple of holes we know were drilled... unusual... which I've commented on here before. They suddenly went oddly quiet as the last holes in that effort were "wound up". Others tried to explain that away as SRSR "running out of money"... LOL!!! I'd already noted there is an erratic, not consistent, effort in reporting out numbers, particularly for elements other than niobium.
The most recent 43-101 update was also very straight-forward in saying there was obvious evidence of additional exploration work being done on the property, that likely had produced data, data to which the author was not granted any access. Hmmm.
I've not studied it closely, but, it might be instructive to study the sequences of events in the things that occurred in addressing the Mountain Pass property, from the time I became aware of it and interested in it (before it was sold), through the time that Dahlman did the Molycorp IPO. Won't be an exact duplicate process implemented here, of course, but, may be some useful indicators of how the early stage work got done, when they were doing their DD on that property ?
I think there is a parallel potential in the financials... that they've done, or are doing, more than is expected. The expectation is that SRSR will get audited financials done, which will enable eliminating the CTO, and move them toward being able to escape the pinks. Perhaps we should be wondering a lot more about the status of audited financials for Nio-Star than SRSR ?
The point of those two essays was... they may be farther along in exploration and in prep for deal making with Nio-Star than many here expect. The inference is that, while I've been lobbying for "another round of effort" in exploration, and thus "little money" deals to fund them... the company might be ready to do "big money" deals instead.
The reality in many successful junior exploration stocks often is that there isn't much, if any, transparency for investors as the company proceeds with getting the work done. The norm is to report early results as they come, while funding from investors supports the effort... but, as they get close to the point of doing a deal... they go quiet, and, when a deal is announced, the stocks don't "trade up" on the news... they immediately correct to the value of the deal being announced, and stick there. Traders who are watching patiently from the sidelines, expecting an entry point will come along, giving them an opportunity to play as traders do... might be disappointed.
Value investors know the routine that is typically involved in corrections of grossly undervalued stocks to the deal price. There is a quiet period... then, a deal is announced... and the stock price corrects to the deal price.
I'm not predicting that will be what occurs here as a function of the effort they're making... on any particular time line. I'm just saying, that IS how it tends to work when big deals get done.
Otherwise, I still find it is more useful, in looking at properties I find interesting, and in looking at stocks I find interesting, to consider value before considering price.
If you've STILL not done your homework on the known indications of value in the SRSR property... you can't say you didn't have the opportunity.
As far as price... my opinion is that the share price is not close to reflecting the value...
What remains is to see that "guess" validated... in the results of some deal that is done...
In the deal making stages, in my experience, there are TWO major risks for investors...
One is that it just "doesn't ever happen"... either because the property doesn't pan out, or because it does, but no one cares, or does anything about it... because management isn't capab;e of making it happen... which is always a risk that exists, and one that justifies the typically fairly steep discount to value in share price, which exists in most early stage explorers. If SRSR had that sort of a "typical" market discount applied to it, IMO, it would be trading for around $0.35 a share right now.
The other risk I've realized in deals done in stocks I owned, is management risk inherent in deals being done, where the stock popped nicely on a deal being done, but with the deal being done getting done at a value well below real value...
I owned shares in a small oil company I paid $0.10 to $0.25 for, that I figured was worth more than $10 a share in deal value. Held it for two or three years, and then they did a deal... for $5.00 a share. As a part of the deal, management went with the assets... got very nice salaries... exceeding those of the management of the buyer. It stank to high heaven. I was wildly "unhappy"... but most other investors loved the $$$ result in the pop... while I was pissed about the loss of value. The company that was the buyer ran up $35 a share and more... based on the same set of assets we sold them for $5.
So... shorts are active, here... What is the interest ?
There are MANY reasons one might want to put a lid on the share price, and use shorts to do it...
Management might benefit from keeping the share price low... to ensure "head space" in the price related to deal making potential. That is reasonable, from a management perspective... but, it doesn't really matter if the deals being done aren't a sale of "the company", rather than a sale of "an asset" which will have the company survive the divestiture...
Investors might benefit... if the effort enables them in accumulating more shares at prices well below value...
Those negotiating on the other side of a deal might benefit... by starving the company for capital while squeezing the company for a better price on a buy of assets or securities...
Competitors might benefit... by slowing progress and seeking to make a competitor irrelevant... trying to push them to the back of the line in the financing game... or putting them out of business by cutting off sources of needed capital.
And, of course, shorts might benefit, from nothing other than effort made while trying to win on their trade on a short sale...
I think the nature of the effort you CAN see in the market, is likely to have a rational connection to the NATURE of the effort you see being made...
My analysis is that Scott and Dahlman can manage to get a deal done... and I expect their focus on deals done will be for sales of a JV interest in an asset, or sales of interests in a JV company that is not currently publicly traded... so, deal values that result from that effort will be determined by things other than the SRSR share price. There isn't going to be a "better deal" for a buyer who is negotiating, expecting that deal will get done on better terms because of the obvious effort in suppression of the SRSR share price. I don't think the management are working on a deals to benefit themselves or others outside the company at shareholders expense, in a deal done on terms that are less than fair.
Otherwise, there is clearly potential for parallel interest to exist... between investors accumulating who benefit from lower prices... which might have them working in parallel interest with others, who might be seeking to harm the company for competitive reasons, or seeking to profit from killing it.
There clearly IS an interest in accumulation...
There is pretty clearly ALSO an interest in purposefully destructive behaviors, those being apparent enough, that appear to me to be more consistent with competitors... and/or shorts who are doing their bidding, or working with them in parallel.
Whatever the source... the result is a significantly depressed share price... that is not close to reflecting value.
That is a long way around, but, getting to what I expect...
I expect SRSR will do a deal... at the point where all sides are ready to do it and have it be announced... and the odds are, IMO, that the deal that gets done is not likely to be one that lights a slow fuze... rather than one which corrects share price undervaluation to true value... on the announcement of the deal. I think there is more information in hand than investors are aware of... leading to a potential a deal that gets done might be done at a larger number than many expect.
I expect SRSR will survive and thrive following a deal for Nemegosenda, with the deal being done through and with Nio-Star...
Otherwise, this is still an exercise in reading tea leaves... and I'm STILL not in any particular hurry to have any of that happen... as I STILL would rather have them do the right thing while operating the business, doing it the right way, in the time that takes, to maximize the VALUE in the deals that get done...
My primary focus as an investor will continue to remain on the VALUE that is apparent in what they own, on events we see that make it clear what that value is, and what is likely to occur based on it... and, in the market, I'll continue to focus on the nature of the market activity that is apparent... and what it means to me as a value investor holding shares in what I think is a quite wildly undervalued exploration company.
FWIW... and JMHO
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