Core Gold AGM 3) - CEO Presentation C - Strategic Process i)The most important part of CEO Mark Bailey's address was discussion of the strategic process, now fully underway.
Core Gold wishes to go to the next level and is seeking financing and/or strategic relationships for portions of, or all of the company.
Core has managed extremely well to have come out of a period of a full halt to its activities way back in 2016, and since then sustainably achieved surface mining, and likely finally achieved an overall company profit, benefiting as well from substantially lower debt and higher gold prices. But to properly explore and exploit them, the desirably long-striking, high grade and surface-exploitable deposits and mineralization of Core need quite another level of finance and development.
Outside parties have pointed out that Dynasty production is capable of being moved up significantly from current production levels of roughly 20,000 ounces/year, to more like the 100,000 - 250,000 ounce/year stratum. And Copper Duke and Linderos are begging for truly substantive exploration and early-stage exploitation, both having producible ore right at surface. There is every indication that they are major plays. Mark Bailey informed the AGM attendees:
“We’ve told the market that we’re open for business, and the market has responded ... we’ve cast a wide net to as many companies as there are out there who be interested in our properties or our company”
Shareholders were informed that contact has been made with 60-70 companies offering a good match to Core. Many of those have signed Confidentiality Agreements and made site tours, or are in the process of doing so. Mark added:
“We have a data room, and we have had property tours, and those will continue until everyone who has indicated an interest to visit the properties has visited, and everyone has gone through the data room, and then we’ll see what proposals come forth from those groups companies that are interested.”
CEO Mark Bailey understandably explained that no details could be provided at this point. But he informed that the process would not be open-ended, but would be drawn to a definite close. With a small extension to this first phase so as to accommodate all the interest, of perhaps a couple of weeks or so, this part of the process may well close in late October or early November. Not that anyone would want to turn any serious bidders away.
Core Gold’s financial advisor will assemble the bid data for comparison, but will not make a recommendation - Mark explained that the board will arrive at its own decision. Following reviews by the financial advisor and the company, the most suitable bidders would then be asked to make their proposals definite and binding.
If Mark’s explanations were understood correctly, a bid or bids proceeding from there would go through the normal process of legal definition, whereupon shareholders would be informed in detail. This would be followed by a vote process, requiring very roughly 30-90 days. He explained that more than one bidder may make it through the selection phase, if for example bids can be inter-related, especially if there is interest for different properties.
The lay of the land at Portovelo is shown below. In the far background, the high roof of the blending stockpile shed is seen, and at mid-right is seen the process stockpile building. Process tank #1 appears lower-right.
CEO Mark Bailey underlined that the board would fairly seek the transaction or transactions that achieve best shareholder value. He outlined that there could be many types of bids, including multiple types entertained at the same time:
• Equity or debt financing, streaming, convertibles
• Core and non-core asset sales
• Strategic investments
• Joint ventures
• Mergers
• Whole-company takeover bids, and/or combination bids
On October 15, 2019, Core Gold amplified and clarified its previous announcements in a strong press release, which in a strong and clear fashion also responded officially to Titan’s Circular for its second-time-round bid.
Of particular note, it highlighted that 17 companies have signed Confidentiality Agreements (CA’s), and that 9 have taken or will take site tours, suggesting a substantial level of commitment by bidders. Please pardon the longish quotesfrom the press release, but it does outline the process usefully:
"The Strategic Review has resulted in several non-binding indications of interest. At the date hereof 17 parties have signed confidentiality agreements with Core in order to conduct due diligence activities. Nine parties have requested or conducted site visits.
"The Board of Directors considers that the continuation of the Strategic Review process and, in particular, providing sufficient time to interested parties to complete their due diligence activities and for the Board of Directors to evaluate their level of interest, is vital to identifying the transaction that is in Core Gold's best interests.
"The timing of the Titan Offer is intended to pre-empt the Strategic Review process and is intended to force Core Shareholders to make determination on the Titan Offer without Core Gold having had the opportunity to fully canvas the market and other available opportunities. Titan was given the opportunity to participate in the Strategic Review process but declined.”
coregoldinc.comhttps://www.coregoldinc.com/news-releases/2019/core-gold-announces-filing-and-mailing-of-directors-circular-in-response-to-the-unsolicited-takeover-bid-by-titan-minerals/
On one of the discussion boards, “EDX” wrote “When I asked Mark if it was more than a handful of companies likely to put binding offers on the table, he wouldn't answer the question explicitly, but body language betrays the truth and I'd go all-in that there is a lot of interest out there in doing a deal with Core Gold.”
Below: some of the four CIP process tanks at Portovelo.
