The Market has got it wrong on CZR
Executive Summary
The smart money has largely disappeared, and CZR’s share price of 16.5c is now well below pre-acquisition announcement levels (e.g., 21c in November 2023), reflecting a 0% probability of FIRB approval. At this price, the market seems convinced FIRB will never approve Miracle Iron’s acquisition of Robe Mesa.
But here’s why the market’s pricing is likely wrong:
FIRB Approval Is Still Possible Post-Election
FIRB delays are politically motivated, with China-linked investments being a sensitive topic ahead of the election
Post-election, approval becomes more likely, especially under a Liberal government that has criticised current delays.
2. Miracle Iron Is Unlikely to Walk Away
Robe Mesa is strategically vital for Miracle Iron, complementing their nearby Paulsens East project and ensuring supply security for trading partners
Their significant investment to date suggests they’ll hold out until after the election.
3. Third-Party Bidders Add Upside
If Miracle Iron faces continued delays, CZR’s engagement with an investment bank could bring in a competing offer from buyers like Mitsui or Robe River JV before the Australian election in May 2025
At its current price (~16.5c), the market has priced in extreme pessimism, but FIRB approval or a competitive bid could deliver significant upside.
