RE: RE: Will Marathon Gold and MOA merge - my thou"
MAR will likely have 22MM shares out within a month of new listing(before year end 2010) due to needing to cash up for an aggressive winter drill program at VL....there will be lots of interest from big names wanting to get in early on their first PP."
a very interesting and ?prescient remark C_G.
From the September/2010 Marathon NR regarding Marathon Gold's formation:
- the Stillwater acquisition offer is structured to deliver shareholder value:
one MAR share = 0.112 SWC share + C$1.775 cash + 0.5 Marathon Gold Corporation share
- Marathon Gold Corporation is projected to have C$6 million cash and
approximately 18 million shares upon completion of the transaction.
MOA's current market cap on a fully diluted basis approaches CDN $45MM.
If the market is assigning 80% of this value to the Valentine Lake Project, a figure of ~$35MM is calculable. And as 50% owners of the Valentine Lake Project, Marathon Gold would be given a share price value of ~CDN$2.00/share, assuming Valentine Lake is its one and only asset at inception. Thus, C_G's 22MM Marathon Gold shares number is indeed credible and possibly done through an early Private Placement.
In reviewing the MOA/MAR agreement and assuming any Marathon PGM payments will be assigned to Marathon Gold as per MAR's obligations to acquire 50% of Valentine Lake, $250,000.00 will have been paid to Mountain Lake by January 2011 in 'assisting' Mountain Lake acquire 100% of this Project from Richmont. Marathon Gold will have $2.75MM remaining, that and an estimated figure ( my own ) of upwards $2.0MM for further exploration and drilling at the Project to complete its terms in the MOA agreement. It is assumed that Marathon Gold will wish to act on its Valentine Lake buy-in sooner than later. Marathon Gold's treasury with $6MM may be depleted quickly. It will wish a higher Mountain Lake share price to be reflected in its 50% ownership of Valentine Lake - a Private Placement at greater than $2.00/share means less shares to be issued and 4 million shares would generate another $8MM for Marathon's treasury. Salman Partners et al are currently attempting to place MOA shares at $1.05. But what are Marathon's Bay Street advisers recommending to its Leadership regarding the share pricing of any new offering? Marathon Gold will want cash, but the Street players will dictate the terms. As was stated "
big names wanting to get in early on their first PP ", more shares, more profits. Do conflicts of interest arise in situations such as these?
As an aside but of notable importance, Mountain Lake's agreement with Richmont ends in year 2014. Perhaps a timetable of Montain Lake buyback of Richmont's ownership can be posted by the more knowledgable at this BB.
Nevertheless, the pressure is on Marathon Gold to perform. The convergence of timelines with regards to Marathon Gold's birth and the new Valentine Lake 43-101 reserve estimates is, I believe, no co-incidence. And though the current trading of Mountain Lake remains somewhat of an enigma to me, when the new 43-101 reserve estimate does arrive, these two companies will want a much higher share pricing to reflect each's intrinsic value at Valentine Lake. The Street will assess Valentine Lake's worth and the share prices will adjust accordingly.
Best of luck to all,
DSH