Being SCREEWED? This will make you VOMITBackground readers FIGHT with your shares. Come forward and add to NC’s list if you have shares and you haven’t already done so. It’s easy to get a Stockhouse alias.
MINORITY HRG SHAREHOLDERS, STAND UP TO THIS TERRIBLE INJUSTICE!!!
DEEPER LOOK: HRG vs KazakhGold
IMO, KazakhGold is a company with issues far greater than HRG’s issues, yet it is being valued at $32,853 per quarterly production oz - HRG’s share price should be $3.85 with that type of valuation (see analysis below).
KazakhGold – Current Assets and Strategic Investments vs Liabilities
KazakhGold said this in an Apr’09 NR: “Further to the announcement of 29 December 2008, the Company’s production levels and working capital levels have deteriorated substantially more rapidly than previously anticipated and KazakhGold requires a funding commitment, in order to continue to operate as a going concern in its current form.”
As such, the most recently published numbers for KazakhGold (June 30, 2008 – which I am using) has substantially deteriorated since then.
There was also an Apr’09 NR that states that KazakhGold has temporarily suspended trading.
KazakhGold’s Current Assets less Payables = $151.5M (inventory, receivables and cash, subtracted by payables)
KazakhGold’s Liabilities (excluding Payables) = $594M
Net KazakhGold’s Current Assets (and Strategic Investments) and Liabilities = deficit $442.5M ($151.5M less $594M)
High River Gold – Current Assets and Strategic Investments vs Liabilities
HRG’s Current Assets less Payables = $109.5M (inventory, receivables, other current assets and strategic investments, subtracted by payables)
HRG’s Liabilities (excluding Payables) = $106.5M
Net HRG’s Current Assets and Liabilities = surplus $3.0M ($109.5M less $106.5M)
Valuation Analysis:
As mentioned previously, Polyus (Russian company) has offered $269M for 50.1% of KazakhGold, which is equivalent to around $538M at 100% of the company.
However, it doesn’t stop there, as I have demonstrated that KazakhGold (last reported) carries a deficit of $442.5M.
As a result, the full value Polyus has assigned to KazakhGold (by way of its official offer) is $980.5M ($538M + 442.5M)
In other words, Polyus has offered KazakhGold $32,853 Cdn ($29,330 US) per average quarterly KazakhGold production oz.
As we know, the offer Severstal has made to us is similar to the $.215 trading price (which has been capped for a long time now due to the various non-balanced public communications and lack of appropriate actions, IMO) which carries a $1,836 Cdn mkt cap per Q1'09 HRG production oz, based on yesterday's TSE 3:15 pm EST market capitalization.
Using the same methodology, HRG’s Current Assets and Strategic Investments vs Liabilities position carries a surplus of $3M, and not a major deficit like KazakhGold’s $442.5M.
The KazakhGold offer just received from Polyus, based on value per quarterly production oz, is equivalent to $3.85 per share for HRG’s production (NOT $.22!!!!)
You can look back to my previous posts to get quarterly production ounces and other details, if looking for such data.