RE:RE:RE:RE:RE:interesting blurb on RandgoldActually, when you peel back the IMG onion, they really don't have as much cash as they keep talking about. Most of that cash is not free, but debt-backed and restricted. Take the debt out, IMG only has $200-300 cash and bullion.
The popular thing about gold companies today to to get rid of debt. They are all doing it and/or bragging they have no debt. Letwin tends to follow the herd and I think they may be headed toward repaying some or all of the debt. If you note the Q2 CC, there is absolutely zero talk about investing and spending cash and 100% talk about conserving cash and reducing costs. At the moment, IMG is paralyzed from doing anything except cut spending. Even Westwood isn't getting fixed, they are just slowing down production to a "safe" level.
Under that theory that they will pay down some or all of the debt, I have to wonder what is on their minds regarding Boto. Letwin has only said "we are going to watch it", which sounds like watching paint dry at the pace they go. Frankly, I think they have all options on the table right now and don't know what they are going to do. They can't float and equity issue due to the stock price, and they would need up to $300 million to set up the mine for Boto/Diakha. They have some tough choices ahead.
Yet another option is to pay back the bondholders and use the bank line as they need it to build Boto. Right now, they have a line of $500 million I think which I believe they are working with the bank on for renewal. That would be a better way to build the mine as they wouldn't pay interest until they draw the cash. Right now, interest is costing them $40 million per year or so to sit on that cash pile. If they go that way, they can go ahead with the mine build and raise equity financing if and when the market improves.
Still, regardless of their woes and current cash drain, I think MXI is still highly likely to get bought out. The risk of that not happening would be a period of time of $800-900 gold prices which would freeze absolutely everything at IMG.