Post by
paperperson on Sep 29, 2005 10:53pm
Silly talk about Newmont buying VIA at C$12
RE: "Next week to Newmont-"They dont want them drilling up the price this winter-PRICE-$12.00-NEXT WEEK WILL BE GREAT_yeeeeeehaaaaaaaaa "
If you are talking about C$12 a share for the whole company, this would be goofy, ie, way too low.
The only sensible part about these recent rumor messages is that Eleonore does get more expensive each time Virginia management completes another drill set. Also, the majors DO ALREADY KNOW this is a fabulous field of gold, and they DO WANT IT.
But regarding C$12, come on! Check me on this math:
Virginia has 49 million shs fully diluted. C$12 equals US$10.25. the whole company would thus valued at US$502 million according to this rumor, which is only US$150 million more than its present value.
And its present value includes an extremely promising gold field which doesn't even have its resource numbers drilled yet. Excuse me for wondering why Virginia would be in that big a hurry to sell? The gold isn't going anywhere, they have a lovely relationship with Quebec, and they have loads of cash and no debt! What is the big f...g hurry?
Virginia's present value includes a comprehensive and vast set of land claims in Quebec province, more than C$30 million in cash, and what Bob Bishop and other reputable newsletter writers have pegged as the best gold mine field in a decade, maybe the best since Hemlo. Hemlo is 20 million ounces of gold. At Eleonore, I think it is fair to assume a strippable resource of at least five million ounces of gold, with God knows how much more down deep.
Just stacking Eleonore up with Arequipa in Peru, purchased by Barrick in a cheaper gold environment for C$1 billion, which would you be smarter paying C$1 billion for? A long-life mine in Quebec or one in Peru, where the Shining Path or whatever can come crashing down on the government any year, and where the current government hangs on by a thread?
The situations are also parallel in that Barrick was paying up after just a few drill holes, just to keep the explorer from proving it out and the price from going higher.
Therefore, the Eleonore mining property alone would/should go at quick-sale for C$1 billion OR MORE, and that would be the price Newmont or Goldcorp or Placer or whoever would have to pay to assume 100 percent ownership of Eleonore and prevent Virginia from continuing to drill.
What might make sense, and something I would love to participate in, would be for a fine company like Newmont to take over Virginia through a share exchange. I would cheerfully turn over three Virginia shares for one Newmont share. (NEM US$48; VIA.TO, US$6.50).
A three for one exchange would value Virginia at US$782 mm in Newmont stock. A two for one exchange woudl value Virginia at US$1.18 billion, which is probably wishful thinking.
But the reason this three for one swap would be more palatable than the cash is that under U.S. tax laws, I would be getting a tax-free exchange for a much more diversified portfolio with which to ride out the gold bull market.
I would welcome other hypotheticals. Just trying to make sense out of the numbers involved here.
Regards to all, PaperPerson
Comment by
megacopper on Oct 01, 2005 8:23pm
Newmont will be buying Gitennes Exploration GIT long before it takes out Virginia Gold!!! Watch and learn this week, GIT will be releasing drill results out of Peru that will get both Newmont and Barrick's attention. BTW, Barrick is the more likely candidate to take out Viginia.
Comment by
Grouchos on Oct 02, 2005 7:39pm
What have you been smoking? Newmount most likely buyouts for this year or early next year are shoregold and virginia. Both have huge ore or kimberlite bodies and Newmount loves them both. Yes Newmount will likely buy out via at 12-14 bucks. It's just a matter of time.
Comment by
etwhite on Oct 03, 2005 7:24am
Megacopper just gets on other boards and pumps GIT. Was a nuisance on the MMI board for quite a while.
ET