GREY:OLEPF - Post by User
Post by
hoosier1on Feb 26, 2008 10:19pm
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Post# 14551028
Recent Acquisitions
Recent AcquisitionsFollowing up on resource and cost evaluations, did anyone notice Barrick's purchase of the remaining 40% stake in the Cortez Mine in Nevada?
The Cortez Mine is resourced out as having 7.5 Million oz. It was originally held 60% by Placer Dome and 40% by Rio Tinto. In 2006, Barrick bought out Placer Dome's 60% stake for $10.4 Billion. That is 60% of the 7.5M oz of gold - which is 4.5 M oz . The transaction calcs out to $1,387 per their share oz.
Yesterday, Rio sold their remaining 40% to Barrick for $1.7 Billion. 40% of the 7.5M oz is 3 M oz - the balance of the 7.5 M. This deal is a comparative steal at $567 per oz.
Overall, Barrick spent $12.1 Billion for 7.5 M oz. Result...$1,613 per oz
Rio Tinto is selling off assets to help ward off the take-over bid by BHP. Whether or not this has to do with the negotiated price is anyone's guess.
Main point here is at a disounted price of $600 per oz and with ONLY a 2 M oz resource - OLE is a $1.2 Billion buy - or $20 per share. From the previous calculations, you only have to resource out half (1/2) of the sites area at a depth of only 60 meters with a grade of 4 g/t to get 2M oz.
Most past posts have referenced a "first intial" resource report on specific portions of Sabodala to be a reserve of 2M oz....
Curious
hoosier1