RE:Spin Out (US Nevada) NewsYes, a significant and I believe positive move by CBGDF, which separates the potentially longer term value/growth of FG from the potentially explosive growth of Nevada (particularly, if gold goes up). However, FG may not see real SP growth till we are much closer to the production phase which could be 2021-22 (by the way if you have not seen the newer CBGDF site for the FG project, check it out at
https://montagnedor.fr/). The recent static CBGDF SP may be why people have been selling as the explosive growth has gone for the present and there are better early explorer opportunities perceived elsewhere.
Further we are limited by the coming battle between the environmentalists in and outside the French government and Macron and NG (did you notice that apparently NG has tried to avoid public debate by revising its reported initial mine costs from approx. 260 mill which is above the amount that triggers required public debate of a major project, down to 80 mill which bypasses such a need). I doubt we will see any buyout attempt for some time to come even if NG/CBGDF put it out there together (remember IAG lost $100 mill on Camp Caiman in FG to environment obstruction); seems to be too much risk yet for a buyout offer (but I could be wrong, NG might try a low ball offer, especially if they think they can convince shareholders to sell at a e.g., 25% premium rather than waiting for the increase in SP well above todays, which will occur in sync with the production phase in 2-3 yrs.)
For CBGDF funding the FG mine via a loan or streaming agreement is likely though it will be expensive. However, it puts all the stress on NG to majority fund and buildout and allows CBGDF to concentrate on Nevada via Allegiant. If NG builds through to production I doubt they will then sell as it will be one of its biggest mines with prime mover status in FG. Nor, would it be easy for CBGDF to sell its share either with any streaming arrangement tied in. However, CBGDF holding to buildout would not be a bad thing for shareholders who potetnially will see a growing SP and might even see a dividend at production. For example a conservative 15% of production = approx. 33,000 ozs x $500 ($1300 gold/costs $800) = $15,000,000 PA - Div., 10 cents).
Overall, most want a CBGDF FG sale but this may be well off and the longer we go from a contrarian perspective the more difficult it may become to sell the asset. Again, IMHO for those with a long term perspective you may be very well rewarded as the mine comes online (however, again this is a good scenario for NG to try a low ball offer that looks enticing to those with a short term perspective while they also hold the more explosive possibility in Allegiant).
With regard to Allegiant (ALT my id) I think a major reason for its’ creation is not only to separate out the stock limitations created by FG, but also that Andy Wallace and Cordex who brought the Nevada claims to CBGDF are getting impatient. Wallace holds royalty rights on all these claims and his interest has always been in Nevada (not FG). He wants these rights exercised and time is not on anyone’s side. A one ALT share to 5 CBGDF arrangement means a tight approx.., 31 mill initial shares. It’s the private placement which is really interesting. How many shares, how much and to whom? Watch to see if Newmont, Barrick, Kinross or NG or IAG etc., take large holdings within the private placement (a majors’ desire for a large private holding could positively impact the declared SP and suggest the level of interest in a buyout in Nevada).
Interestingly, Guistra stated in a presentation 2 yrs., ago that Eastside was not for JV. With minimal drilling ALT already has approx. 1.7 mill ozs inferred; 721,000 ozs (plus, as stated by Guistra another approx. 700,000 ozs outside the pit limit so not formally included in the estimate) plus 272,000 ozs historical. Three or 4 drills going 'hell for leather' in Eastside could very quickly produce many more ozs; this coupled to a fast rising SP in a potentially positive gold environment over the next 2 years (with ALT holding 100% ownership at buyout!). However, should Guistra decide (maybe swayed by Wallace’s guidance re., the Bolo possibilities) that an Eastside JV is the way to go then this would allow a major to take up those costs (while reducing ALTs % ownership). Now ALT could concentrate what should be a very large sum for an explorer on the Bolo claim with the serious potential for another major gold project.
Guistra is apparently now building out this gold explorer. Most ‘hands on work’ for CBGDF in FG is now complete; they are now along for the ride, short or long. We wait the recent exploratory drilling to strike and depth (though I don’t expect results will have much impact on the CBGDF SP, as production is the focus). ALT should have a very nice $$ pot to really drill Eastside and later sell with ALT retaining 100% ownership and total shares possibly below 100 mill. Enticingly, should Guistra look for a JV to feasibility in Eastside then ALT is carried here and a third company may arise if the millions are now instead poured into Bolo drilling (I sense the other Nevada claims will receive cursory drilling to excite the market). Hence we have two possibly three real company sites emerging from this intial company holding. A very interesting proposition for anyone who wants to hold longer term for the potential rewards (SP plus increase in shares spun) that may evolve over time. But like anything stock related you need to watch closely and get as much info as you can before making decisions.
GLTA holders