AUR Takeover Bodes WellFirst AUR being taken-out at great price - more than 10X EPS based on US$3.00/lb. copper.
Second, if people remember, AUR's biggest asset (Quebrada Blanca) was an asset that Teck sold to AUR for a song many years back. Many said Teck would never buy AUR because of that reason. But memories are short, I guess. Anything is possible in this hot metals market. Some people say that nobody would buy ARG because they are not a real mining company. But I say they are better. No mining risk. Benefit from largest mine with 100 years of reserves. And technology that could be applied elsewhere, especially if copper prices stay high.
I think ARG is a great take-over target for First Quantum. It would give FM a foothold in Chile and a helping hand with a relationship with Codelco where few foreign mining companies have relationships with. As well, FM developing a large copper-cobalt tailings recovery project in the DRC (Congo), when they acquired Adastra Minerals.
But even without a takeover, ARG will go up. Super strong earnings with EPS of US$0.40 this year and low valuation. And copper back above US$3.50/lb. Easy potential to double its earnings with Colihues. And all the investors cashing out on AUR may buy some ARG just to reinvest their money if for no other reason.
ARG easily going comfortably above $3.00 after Q2 results (US$0.10 guess). I say it makes its next run to $4.00 by the end of summer.