Post by
Digger0144 on Jul 12, 2022 9:39pm
Staged For a Sale...Sooner Then I Thought...Why?
Disappointed to be sure! What can we expect? The market will let us know accordingly. As I stated before...speculative buy...an investment in PGM...you had to be prepared to lose it all...that was at around $.16.
I am going to stick around for now...the market action in the next couple of weeks whether positive or negative will begin to layout the interest if any in the Pure Gold operation.
The most obvious suitor and the one that would gain immediate synergies is Evolution Mining. The Pure Gold Mine is contiguous to their Red Lake operations. Evolution purchased the Red Lake Mine in April 2020 for 375 million US and followed that up with the purchase of Battle Mountain in May 2021 for 343 million CDN....both contiguous...very nice!
Evolution has done an amazing job in terms of a successful "operational transformation plan"...the numbers speak for themselves. I was hoping that the Pure Gold management team could do something similar..that is not going to happen.
Will they be interested...for sure! The synergies are so compelling to say the least. The issue is..what are they willing to pay for it...let us take a look.
Pure Gold's market cap is at about 113 million...their present debt stands at about 130 million which includes the latest financing agreement with Sprott Lending. My research indicates that Evolution has financed both purchases that I mentioned with debt only...their interest rate stands at about 3 percent...amazing. They would refinance the debt which would reduce the operational costs significantly.
We have to remember that along with the last money raise 200 million warrants were attached @ $.18 which expire on November 25, 2022...any offer above that price would result in the warrants being exercised. The nice thing is that the buyer would bank that money so anything above the $.18 would be the only out of pocket monies for the buyer.
Evolution paid 343 million CDN for the Battle Mountain Mine which to date does not have the resources that Pure Gold has. The problem with Pure Gold is that not enough money was spent on mining development and infrastructure leading to the problems that they have been having...that problem has not gone away...much better...but...still needs a lot of work.
The Board of Directors authorized recent options...35 million @ $.275...any purchase price above that would result in those options being exercised...therefore the float would be increased accordingly.
Let us use a float of 1 billion shares.
To be continued on my next post.
All the Best!
Digger0144
Comment by
shelby2 on Jul 13, 2022 7:57am
digger 0144 u say pgm can get to 100,000 oz , if so why sell they would be making lots of cash and then hit the 8zone. also u think .30 c is fair as a start so u saying maybe higher with them reaching 100,000 oz or cash pos. i dont think o dea would sell this that cheap, at least not .30 and why no premium to shareholders, i think $1.00 is more fair , just saying
Comment by
Rockormen on Jul 13, 2022 8:14am
maybe they have no other options but to sell? Given all their problems.. I have always thought getting back to production would save us but perhaps not.