RE:After readingWell, in the ETG case it's not likely to be such an open bid, we may get swept up in a lock-up deal negotiated by SSL, management and Rio/TRQ, in which case unless there is a drag-out proxy battle, the price will be beyond our control.
On valuation, the Edison Report said $3.60 or so. There is still a Mongolian haircut to be negotiated, but the discount rate used by Edison and the much lower than current spot copper and gold prices more than compensate. I'd also like to see some exploration on the JV - people seem to forget that OT remains an incomplete drill play because Rio stopped adding eggs to the basket they were fighting with the Mongolians over. You know, one shallow high gold target on the JV, hits a viable deposit and ETG has 30% above (560m ? - forgive me for being too lazy to look it up) changes the entire complexion of ETG.
And up by the Airport, HNE extension, out at Shivee West Zone 3, Argo, on the JV X-Grid which was the main target in 2004 and the proposed drilling targeting shallow gold was never completed once the Earn-in was signed. Castle Rock, the SW Heruga targets ... they are dots on the corporate presentation maps in the slide set.
The assets are valuable, much more valuable than any market cap ETG has ever traded at - but recall for 15 years or so it has suited Rio and Mongolia to both play down the upside value. Look at how beaten down TRQ is - Rio has played the "BOO - Mongolia is scary" card repeatedly yet always managed to move forward. The Mongolians want another pound of flesh, we have always said hang on, we threw in 80% already you and Rio are already dining upon. In any sell-out you have to leave some considerable upside on the table as well as the buyer asssumes all future risk and cash on the barrel head is risk run to zero. Mongolia will want some piece as we head out the door. But fundamentally - 20 - 30% of the whole JV and 100% of Shivee West, the JV fully financed to production, copper and gold prices looking robust, a fully diluted market cap of under $175 million USD today? Paltry!
What is most interesting now is the upcoming disclosure and track of the bid price. Rio may well withdraw just to beat on TRQ's fragile psychology some more. We'll see. ETG ... meh, thin trading in special situations doesn't indicate true value.
cg