RE:RE:SOLD Lifexprt.. I don’t believe so. I was investing to see the company Argonaut Gold succeed in operating the Magino mine, but as of today, the potential for massive returns ceases to exist from my perspective. I was interested in a move up from the pennies to the range of a dollar or higher. The deal seems to be set in stone, hence the $20 million break fee.
I think the stock AGI will continue to increase in value while gold continues to rally into new all-time highs. That means when the acquisition is approved, the share price of AGI could be much higher than it is today.
Since there has been a price placed on Argonaut Gold’s stock at 40 cents by Alamos Gold, I don’t believe investors will want to purchase shares at or above 40 cents.
During the acquisition of Marathon Gold, insiders were dumping their shares around the acquisition offer price and it caused a sell-off. When the acquisition of Marathon Gold was approved, the stock price was below the acquisition offer price.
I also don’t like the 10:1 share consolidation of SpinCo shares upon IPO. I don’t really care to own Florida Canyon or Mexican assets as I was investing in the company Argonaut Gold because they owned the Magino mine and Magino has massive potential to grow.
Mexican assets have been draining the company’s bank account for years. Hence, the company is attempting to dump the assets. As for Florida Canyon, it is not profitable. The strip ratio for waste to ore is 90% lower than what is stated in the tech report, and a strip ratio of about 0.2 is very uncommon. The operation is currently not feasible with a 0.2 strip ratio; imagine if they were running the operation at 2.4? A strip ratio for waste to ore of 2.4 is actually good.
Lastly, I have the option to purchase AGI shares on my margin account, or purchase options. Like I was saying, when the acquisition is approved, the share price of AGI could be much higher than it is today. If AGI’s stock price continues to climb into all-time highs, the value of your AR shares subsequent to conversion will be the same as stated in the acquisition offer. This would be similar to buying at an all-time high.