Excelsior on Chinese Takeover RumoursIf you like your deep state conspiracy theories leavened with down to earth mining analysis and access to a consistently brilliant poster check out Excelsior on the Kereport. Here he is today.
Excelsior says:
There are a few rumors circulating that (JAG) (JAGGF) Jaguar Mining may get acquired by a Chinese consortium in the next week or two. Please say it ain’t so…
Now with their gold hedge off and the Covid-19 shutdowns behind them they were finally ready to start making some ceddar off the higher gold prices.
While I’m a big fan of positioning in distressed Producers near their lows for a takeover, or top in class Developers (after they have re-rated and have run higher) for a takeover — this is a different scenario. With a company like Jaguar that is about hit their stride in production with nice revenues and cash flows in this elevated price environment, I want to see them go a few quarters and keep moving higher before getting picked off before they blossom.
Hopefully it is just a rumor, but I’ve got a nice position in Jaguar, and if they get acquired for a 40-60% premium here, I’ll book the win and move on to the next opportunity, but I’d like to see something like a takeover wait until 2021 or 2022 for JAG.
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On July 9, 2020 at 12:07 pm,
Excelsior says:
Having said that, if there is a larger Chinese mining company looking to acquire Jaguar, then they likely want to scoop it up here on the cheap before they get a chance to run higher and put a few solid quarters together. I see JAG as a 5-10 bagger from here, so hopefully it doesn’t get nabbed yet.
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On July 9, 2020 at 12:46 pm,
b says:
I have Jag too.
That is not a “fun” rumor, I really dont like take overs.
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On July 9, 2020 at 1:06 pm,
Excelsior says:
I like takeovers in the right environment. For example, if there is a really distressed producer (like how Crocodile Gold Klondex or Alio or TMAC or Guyana Goldfields were) and one can position in front of that near the lows then that is a good time for a takeover.
Another scenario is positioning in an unloved developer that is getting re-rated higher and then gets nabbed, or a developer moving into production (like Pure Gold is currently) and it gets acquired that that is a win.
What I don’t like is a small to medium producer that has just gotten done turning their operations around in a rising metals environment (like where Jaguar is currently) and they’d have much more room to the upside just based on their improving economics. Again, with JAG I’d much prefer them to be stand alone and put out 1- 2 years of solid production metrics first, and then possibly get acquired down the road at a much higher price.
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