Oromin Explorations Ltd OLEPF

Buyout Price Est.: $3.50-$3.75

[nailati]

Since nothing that I have read here lately, nor heard from my discussions with people close to the OLE story, has changed my mind – I am still sticking to my $3.50-$3.75 buyout estimate that I discussed a couple weeks ago. I will mostly reiterate what I said in my last post.

In March, AUX Canada bought Ventana Gold for $1.2 billion, and Ventana had 3.5 million ozs gold with some silver and copper. That`s about $340/oz of gold. Although maybe a bit lower due to the silver/copper resource.

Also in March, Newmont bought Fronteer Gold for $2.0 billion and Fronteer had 6 million ozs gold. That`s about $333/oz.

I for one am not holding out for 5+ times the current market price. But based on the numbers (resource, blue sky potential, cash on hand, etc.), and despite OLE`s poor promotional efforts, 3x the current market price (with a bit of appreciation to the $1.20 level in anticipation prior to the offer) is achievable giving a takeout somewhere in the $3.50-$3.75 range - which equates to about a $1.1 billion takeover price. That`s about $300/oz. Don`t see how this is unrealistic.

Let us not forget that Mackie Research updated their report on Oromin in May 2011. They have a price target of $3.25, and this was not including any potential ozs from the deeper drilling nor from the blue sky potential, which could be substantial. And I think we would all agree that Mackie`s research analyst, and subsequent very detailed report, is worth a lot more than what any of us think.

So I continue to stick with a $3.50-$3.75 buyout price.