RE: MMG vs DRVMMG vs DRV
using shares outstanding multiply 24.8 Duran times the price ($2.75) add add the value of Duran shares MMG owns (approx 1.2*$2.75. Divide the total by the number of shares O/S for MMG (58). This results in a value of $1.23. This calculation doesn't include any value for the Mexican properties. You should add at least 25 cents which it was trading at when no one new anything about the Peru property. The total should equal a value of MMG shares or $1.43 Far below the trading price of $90 cents we had most of the day but closed at 95 cents. Using the closing price MMG should be trading at 50% more than it is presently.
You can repeat the above process and value both on a fully diluted basis and MMG should be selling at $1.51.
My explanation as to why there is a difference goes as follows: MacMillan has been around a lot longer than DRV. There are many shareholders that have been in MMG for years. Looking at the price charts MMG traded to 60 cents in March 2004 and failed to reach the old high in Feb 2006. Again in April 2007 the stock fell back from its old high and as recently as Sept 2007 was trading below 30 cents. Many shareholders have given up waiting and are frustrated by the slow progress, measured in years rather than months. They see this as their exit opportunity. Also there are 5 million warrants outstanding which can be exercised at 50 cents. In fact, 5 million have already been exercised at 35 cents. I believe this means these shares have likely been sold.
Duran on the other hand is relatively new. A very strong group of successful investors saw the potential for much higher prices and bought out most of the weak float in March - May. This group are investors not traders and are holding their shares. Therefore there is a limited supply of Duran stock which must be progressively bid up to encourage the sle of shares.
That's my take.
PS BUY MMG ! It is under valued relative to DRV and is actively drilling in Mexico. Look for drill results from Mexico to add value plus a news release on hole # 5 in Peru. If MMG can start to get good results in Mexico I beleive it will attract buyers to the combined storey and move the price sharply higher as value is given for its Mexican properties. Unfortunately it is often the case that the sum of the parts are less than the whole. This means MMG is likely to always trade at a discount to Duran + Mexico. Duran is the operator of the project, has half the share float and should trade at a premium for this reason.