RE: Tangled together? Like VulturesRight, and I don't like the look in Hathor's eye, like we the NCR shareholders are their next meal.
The more I look into the prospect of the takeover - the more I don't like it. I must say I was enthused about Hathor taking over Roughrider to end up being our JV partner. At the time it made sense to me that HAT would be the operator for the first drill program. Good technical support, other properties, momentum . . . looked pretty good.
But NOT as the acquiring company now, at least based on the past year. Consider -
1. A 2006/2007 Winter Drilling program was anticipated to begin in January 2007. In fact, NCR's last trade of 2006 at $0.78 was the 52 week high trade, and the run-up in NCR's price that occured was based on the reasonable assumption that work would soon begin. BUT NO WINTER PROGRAM TOOK PLACE. For all their technical expertise, Hathor missed the deadline to secure drilling permits in time for the season.
2. 2006/2007 Summer Drilling. Permits for 14 holes were obtained. Only 8 were delivered, 2 were lost with no core recovery, and we have no assays in hand. The drilling rig that was contracted was poorly maintained with several breakdowns and long delays (meaning less information and assays). This says to me that their technical expertise is with computers, not with on-the-ground drilling.
3. During the July to October program, there was NO NEWS FROM THE FIELD. Then the October 25 announcement. No wonder there was very poor market response, the news seemed designed to be as bad as possible.
4. There is the definite appearance of games to take advantage of NCR shareholders. After the news, NCR share price drops like a stone, on volume. Then there is a share price runup in HAT over 10% to Nov 5. After market close, Hathor makes an all-share (0.4) offer to NCR shareholders, with statements on a premium. That premium has since adjusted itself substantially in favour of NCR, from $0.88 HAT-$0.265 NCR to $0.76 HAT-$0.30 NCR. It looks to continue adjusting.
5.Further, if all NCR shares are tendered, HAT shares would be diluted substantially, and their share price would drop to reflect the new market cap. Also, Hathor was financed earlier this year at $1.60 and $1.90, which means a lot of HAT shareholders are well under water. The tax-loss selling now evident in HAT will likely accelerate dramatically into the end of the year.
6. There is too much we don't know, but HAT does. No cores, core logs, assays, field reports etc have been provided. The void they drilled into when they lost one of the holes could very well be a cavern like the one where they found the MacArthur River deposit.
If I am a HAT shareholder, I would say GAME ON. As an NCR shareholder it is HOLD ON. The best means for NCR shareholders to realize true value for their shares is a comprehensive, well-planned, effectively managed drilling program, one with the potential to make a discovery and change the valuation of Russell Lake. Charlie O'Sullivan already has the drills and the crew organized for the next round of drilling, with even better targets than the 8 summer accessible ones. One good hole and with 60% of the property and fewer shares outstanding, NCR shares will get a much bigger bang than the same hole with .4 of a HAT share.
I will not be tendering my shares, and I sure hope they don't get enough to effect the takeover. I've been in this many years, I sure won't sell out the best property in the basin on a low-ball offer.
Ted