Baru Gold Corp V.BARU

Alternate Symbol(s): BARUF

Metals & Mining Gold

Baru Gold Corp. is a Canada-based junior gold developer with NI 43-101 gold resources in Indonesia. The Company is focused on developing and producing precious metals projects in Indonesia. The Company’s focus is on developing precious metals projects with significant resource upside potential and near-term production capabilities. The Company’s Sangihe Gold project mineral tenement consists of one block covering the southern half of Sangihe Island, located between the northern tip of Sulawesi Island (Indonesia) and the southern tip of Mindanao (Philippines). The Sangihe Project covers 42,000ha; this includes the Bawone, Binebase prospects on the eastern part of the island and Taware prospect in the south-central region with infrastructure in place. The Company has a 70% interest in the Sangihe project.

TSXV:BARU - Post by User

Baru Gold Corp

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Post by cincoagainon Apr 25, 2011 6:02pm

498 Views

Post# 18485252

my analysis of the spinout

first off, miwah sisters you are idiots, please go away. So, i am rounding but here is the way i see the spin outs. FIRST for Sangihe: EAS has 80M shares outstanding, so they will be creating 20M shares for Sangihe Gold. Then they will do a rights offering for 14M units at $.40 and raise $5.6M. Post financing, Shagihe Gold will have a 34M shares outstanding and a post financing valuation of $14M (34M x $.40) and an enterprise value of $8.5M ($14M - $5.6M cash raised). Sangihe already has a 43-101 resource of 1million oz of gold. With a post financing enterprise value of $8.5M, that comes to $8.50 per oz in the ground. THATS EXTREMELY CHEAP for an asset like this. So, I would buy the common and buy the rights offering. Lots of upside here.
NEXT for Barisan: They will be creating 20M shares for Barisan Gold. They will do a rights offering for 20M units at $.55 and raise $11M. Post financing Barisan Gold will have 40M shares outstanding and a post financing valuation of $22M (40M x $.55) and an enterprise value of $11M ($22M - $11M cash raised). Barisan already has completed a few drill holes including 690 meters of .4 g/t (.3 copper) and 268 meters of .92 g/t and 59 meters of 1.2 g/t. All very good holes that shout at big potential for Barisan. Again THIS IS EXTREMELY CHEAP for an asset with this much potential. So again, I would buy the common and buy the rights offering. Lots of upside.
CONCLUSION: So, if I were Mr. Li, I too would be mopping up any remaining rights offerings. Once these deals trade, I believe they should move up considerably. Basically we are getting these dividend spinout companies (and EA Energy too) very cheap and thats why the warrants are priced so high. With a few more good drill holes, it could trade north of the $2.25 warrant strike price for the next slug of cash into the corporate coffers to do more drilling. Also EAS should not really trade down much post dividend date because the dividend spin out companies values are currently a miniscule amount of the EAS market cap. Thoughts?

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