GREY:HRIVF - Post by User
Comment by
cjsellon Mar 10, 2010 10:03pm
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Post# 16868789
RE: RE: blast off
RE: RE: blast offSo the question becomes why did Severstal offer a private placement in the first place, and why then would Troika want to sell their stake at low prices when they can wait a get triple+ on their money? Does Trioka have to sell their shares back to Severstal?
I believe the answer is that Severstal used the cash from the PP to finance new equipment (ball mill etc) because of their own lack of funding for capital projects. We have seen that Severstal's bonds are JUNK status, so raise the cash and get increases in production. Troika's ACB is .362 which is 1/2 of todays HRG closing price.
Thoughts?
CJ
From Severstal's FY2009
In December 2009, Group’s share in High River Gold Mines Ltd decreased from 61.7% to 50.1% as a result of a private placement of 150 million common shares to a third party for a total consideration of US$ 54.3 million.