High River Gold Mines Ltd HRIVF

Valuation

[Power1]

TIme to step back,  The fact of the matter is Severstal accumulated the 9.9% with an average cost of around  .50 ( roughly $17 million)  They are injecting 56 million canadian.  Cost base to acquire controlling interest just short of $75 million.  That gives me an implied value of $150 Million.  After Prognoz complete, there will be a total of 624 million shares outstanding. 

So lets give the other 50% prognoz a value of $25 million bringing valuation to $175 million.  That would be .29 per share based on issued and outstanding of 624 million shares.  

Someone could have bought the whole thing for abot $40 million given the circumstances (.13 per share) and I don't think shareholders would have had a choice.  

Be pleased that we now have the cash to turn the corner and also will have the financial backing should any other issues pop up.    While their long term objective may not be clear, I believe share price will strengthen and we would see a minimum .40 to .50 on a complete take out should this be pursued. 

I dont think there is any downside from this price.  Hsare price may be capped should they decide to take it all.  There may be very strategic reasons why they may keep this listed TSE i.e diversifcation, debt etc.

Just my opinion, but longs may have to average down to recover.  Severstal controlling the vote and board.  This will make for a no alternative situation should complete buyout come down the pipe.