RE:Getting screwed or not?next_big_thing wrote: Personally i was hoping for a pour and a pop to $1.00. Now we are getting screwed. .044 EDV for each of our shares? Total rip off. But I'm going to sit it out and see what happens. Since EDV dipped against the market trends for gold i also bought some EDV just in case... Still I like to make 200% on my penny stocks and not get screwed sideways. GLAT.
"Endeavour says the acquisition would increase its gold production by about 110,000 to 120,000 ounces a year in the first five years."
(that is 150 million at todays prices).
"The company is offering to exchange 0.044 of a common share for each True Gold share. In a separate but related deal, it would provide $15-million (U.S.) to True Gold through a loan." (that is only .49 cents a share at close Friday).
BURN BURN BURN
EDV dropped a whopping $1.62 (12.6%) against gold uptrend to close at $11.25. That possibly indicates that existing EDV shareholders & the market is saying EDV has paid too much for TGM... not because of dilution of existing EDV shareholders.... (Sure, it dilutes EDV, but the dilution comes with all TGM properties and upcoming gold pour and TGM Free Cashflow of $265MM from this Karma mine alone). Somehow, TGM board and management agree to this deal thinking that this is a good deal for TGM shareholders. See excerpt below.
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From now on, TGM will trade in tandem with EDV's share price (*0.044) until deal is complete or falls through or if there's another white knight comes along.
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I have always wondered what was holding back TGM when it moved from low $0.20s (I was in) to $0.38 and stuck at $0.38 for a while as others continued to move up with POG. Mayde it's because of TGM share structure (too many O/S shares and options) and the streaming deals put in place that TGM will give up some 20% or more (?) gold oz production annually at low prices.
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What does a long time investor like blitzer2 think about this EDV deal?
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Excerpt from NR:
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"....... "I am very proud of what our team has accomplished at True Gold. In just over three years we have taken Karma from an unpermitted and unfunded conceptual project to a fully constructed mine, nearing production start," stated Mark O'Dea, executive chairman of True Gold. "Our long-term goal for the company has been to grow the business into a significant and highly profitable producer. This transaction with Endeavour accomplishes that goal, giving our shareholders meaningful ongoing exposure to Karma as it moves into production, as well as exposure to Endeavour's exceptional portfolio of producing mines and development projects. We are excited to become shareholders in what we consider to be the premier intermediate gold producer in West Africa."
"This transaction offers a very meaningful share position in a proven and growing intermediate gold producer at an attractive premium," stated Christian Milau, president and chief executive officer of True Gold. "We are excited by the near-term growth profile and future exploration prospects of the combined company. The platform provides our shareholders with immediate exposure to production and an accelerated development strategy with a broader and more diversified asset base."
........"
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