RE:RE:Last day for Tax Loss selling: Dec 24thRichyRich, sorry my statement was misleading, as it was intended to indicate that one or both companies will be bought out without duress, and therefore not exist any longer.
The probability of IMG being bought out is much less than for MXI. Obviously they are a bigger fish, fewer buyers and a very complex takeover. However, if IMG does get bought out, MXI will be gone too.
The other scenario is for MXI to be bought out. This probabilty is much higher for them as IMG's Boto deposit moves rapidly toward a mine decision. Here is an important statement of my opinion: IMG will not move ahead with a mine development at Boto (or sell Boto to another developer) without locking up MXI's Sirabya permits in the process. It just won't happen because Diakha is actually part of the same development and will add value to the Boto metrics as well as extend the life or increase the production there. Look for Q3-Q4 for a decision on Boto after the next 43-101 comes out for Boto and the maiden resource comes out for Diakha.
There are a few risks alright. IMG is in pretty good shape unless they blow off their cash on bad investments AND the price of gold goes to $1000 or less over a sustained period of time. At that point, they will have to take drastic, unprofitable actions. Frankly, I think there is a much greater chance that they will be bought out because their current cash is attractive to a buyer.
On MXI, the risk is this: that the maiden resource for Diahka has a disappointing result and is uneconomic. Early results almost guarantee that Diakha has significant value but we will know more after the resource report comes out. Debt is not an imminent problem, but if the resource numbers later this year are bad, then then only thing that will keep MXI going at the end of 2015 is higher gold prices to justify more drilling in 2016.
On GRIT, they have indicated that they are selling only a small portion of their 30 million share holding. I don't know how much but my guess is in the ballpark of 5 million. Put yourself in their shoes: they can sell at a 50% profit today (.075) and if the worst case scenario happens by the end of 2015 and MXI share price goes back under .05, then their bad management will be exposed for having sold none when it was profitable However, if MXI gets bought out at a big premium late this year, then they will still have a whopping profit on the 25 million shares left. By selling now, GRIT is simply managing risk.
I hope that helps. Yes, there is risk.
The reason I have added to my holdings (which are now considerable) is almost solely on the basis of the drill results so far on Diakha, but also that Boto is getting close to a mine decision (they started a scoping study a year ago). Boto will trigger the purchase of MXI and that will be forthcoming late 2015.