Thinking AheadIf you wanted to lock up a 10 km strike length between the Granada Mine and Adanac what would be the wisest way to do so.
You know you're going to have to wait for GBB's 43-101 Resource Estimate so that your shareholders are confident and stand behind your decision of purchasing the company with proven gold resources in the ground so you'll likely be paying a premium for the shares as you don't have much choice. What you do have a choice in though if you do believe that the Granada property is proving up a significant deposit and want a piece of it is how much you pay for the adjacent land.
How do you think New Gold feels right now watching SQI's share price skyrocket while they cash up and hit nice intercepts at the Davidson property which is connected to Richfield's Blackwater Deposit - RVC proved up 4 million ounces in B.C. and a month later were acquired by New Gold for $550 million dollars.
New Gold knew that they had to wait for the Resource Estimate at Blackwater as well but think of how much smarter they would have looked if they picked up the Davidson property prior to acquiring Richfield?
When New Gold acquired RVC this year Silver Quest (SQI holds a 25% interest in the connected property to Blackwater) was trading at 50 - 60 cents a share. Now they are double that price at close to $1.15 due to speculation about being taken over as well as New Gold does not want a junior around exploring on their new find creating more value.
Because New Gold didn't acquire SQI before RVC's Resource Estimate nor before their buy-out of Richfield they are going to have to pay $60 million dollars more for that acquisition if they want SQI off their land.
While it may have started a fire under RVC's share-price if they did acquire SQI prior to the RVC fireworks they could have just as easily optioned out the Davidson property to take less risk and create less speculation.
The money New Gold would have saved getting a foot in the door on SQI before the Richfield take-over is equivalent to GBB's market capitalization which isn't pennies.
By Osisko getting a foot in the door on the Adanac property they are controlling the area-play effect which would come from Gold Bullion's 43-101 also expected this summer.
They're paying next to nothing to secure 25% of the strike on our part of the Cadillac Trend and stategically did so before THG's share price received some recognition via the GBB 43-101.
Just some thoughts