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Galway Resources Ltd V.GWY



TSXV:GWY - Post by User

Comment by taylor1988on Jan 10, 2012 3:26am
561 Views
Post# 19384960

RE: RE: Gold value in ground

RE: RE: Gold value in ground

I agree with that completely.  I wouldn't be surprised to see as much if not more M & A this year as there was last year given the 2 month period of inactivity as of late as well as the size of balance sheets of the larger gold companies currently.  We're due for a few larger take-overs this year but majors will likely wait for gold to move up and help their share prices to benefit them when issuing stock in deals/prevent dilution.

 

To correct myself when I placed those numbers I'm talking 6 months out buy-out offer, if GWY is around for 12-18 months there's no reason the premium and share price won't be much higher.  It's possible these juniors stick around for a while (the highest grade ones) but I can't see the risk/reward scenario making sense in terms of the majors needing to place reserves.

 

If there's 10-15 projects in the world above 3.0 g/t au with a resource potential of 5 million ounces or more and it would cost you approximately a quarter of cash flows to acquire them and all of their prospective ground, why allow it to be a chess game and wait to see which other player makes the first move?  It's in one's best interest to pay the least and deter getting in a bidding war.

 

The sentiment is terrible in gold and the stocks due to perceived "funding problems" being Venture stocks but those with cash like GWY that have no problem continuing/ramping up exploration should not be punished for overall sector weakness. 

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