RE:RE:RE:What will Eldorado do ?My take on what ELD would do wrt its investment in ICG:
1. Below 20%: ELD can do whatever it want to do, it does not even have to ask anybody (its own shareholders and ICG BoD) for permission. This will be in cash, since it has plenty (~$1B with the sale of the Chinese holdings).
- Maintaining 15%: For sure, since the cost would be just about $2M;
- Increase holding to <20%: Most likely. The cost would be over $10M, say around $14M, but this would avoid paying the premium in a TO offer... $14M is still chump change (a premium offer would cost an extra $6M @ a 40% premium). But this strategy would reveal ELD intention (based on previous TO cases) that it want to put in a TO for ICG soon. As I have indicated in previous posts, ELD may not want to be too predictable. Others, such as G and AEM?, are watching ICG as well.
2. TO for the entire company: ELD is no match for bigger fish like G. If EDG is going after the entire ICG then G or others may easily outbid ELD with offer with a hefty premium with share swap. Dilution in the deep pocket shares would be insignificant, while getting the shares from company like G is a lot more attractive than share from ELD (with unstable jurisdictions like Greece,...and they wanted to spend that $1B on Greece?).
3.The best scenario for ELD: This would involve perhaps South Lamaque only, with the deposits in Triangle and the surrounding deposits such as #4 Plug, etc...(Leave Lamarque-Sigma Deep and the Sigma Mill as a separate package). ICG could spin off Lamaque South and make a deal with ELD. It would be expected that the updated resource estimate for Lamaque South would be in the range of ~4M ozAu, something like PRB Borden Lake deposit for which we have a bench mark price of $526M (paid by G about a year ago). ICG essentially has a target price for Lamaque South for negotaiting with ELD (anything less than $526M, i.e. ~$1.12/s, or ~70% premium over current SP, would be a non-starter). JV (ELD pays some cash and carry all costs for Lamaque South production), or an outright offer for cash? The cash could be partially distributed to ICG shareholders and the rest could be used to develop Lamaque-Sigma Deep and the Mill which could be made availble for a fee (NSR?) for processing Lamaque South ores.
Just my speculation folks. Other options are availble.
GH