Updated. Our options in numbers. Posted first one | | | | | | | | | |
| Assumptions | | | | | | | | |
| Conversion price = | 0.20 | | | | | | | |
| MWS Earnings = | 60 million a year at current production and gold prices | | | |
| | | | | | | | | |
| | Option 1 = Vote No to both deals and be diluted | | Option 2 Sell Ezulwami and buy back as many notes as possible before they convert | Option 3 =Accept AGA deal |
| | | | | | | | |
| Assumptions and comments | The 443.3 million NAV for MWS is from RBC's dec number. I took the current maked down FIU NAV for Ezulwini from the last report. A likely better non distressed value then the 70m currently offerred, but still conservative especially if we can actually get it producing profitably with a lower royalty rate, reduced interest after the dilution and new mine plan | Assume we can buy back 80m at 87.5/100 par. We will realize a gain on this of 10m | Not bad on the surface, but I reject this option because it leaves us with a money losing mine and no working capital. So the numbers arnt accurate as there will be dilution resulting not considered |
| | We Still need working capital, but not much. | | | | | |
| | | | | | | | | |
| | Option 1 | Vote NO | | Option 2 | Sell EZ, buy notes | Option 3 | Sell MWS |
| | | MWS 10x P/E | 8x P/E | | MWS 10x P/E | 8x P/E | | |
| | | | | | | | | |
| | Using RBC NAV | Using 10x P/E | Using 8x P/E | Using RBC NAV | Using 10x P/E | Using 8x P/E | | |
| Ezulwini | $100 | $100.00 | $100.00 | 0 | 0 | 0 | 100 | |
| MWS | $443.30 | $600.00 | $480.00 | 443.9 | 600 | 480 | 0 | |
| Total | $543.30 | $700.00 | $580.00 | 443.9 | 600 | 480 | 100 | |
| | | | | | | | | |
| NAV- Debt= Enterprise value | $375.60 | $532.30 | $412.30 | 276.2 | 432.3 | 312.3 | 100 | |
| Gain on Note retirement | | | | 10 | 10 | 10 | 0 | |
| .=Enterprise value/share afterwards |
.38 |
.54 |
.42 |
.49 |
.75 |
.55 | 0.42 | |
| | | | | | | | | |
| Converting debt | $150.00 | | | 70 | 70 | 70 | 0 | |
| Current Shares | 237.90 | 237.90 | 237.90 | 237.90 | 237.90 | 237.90 | 237.90 | |
| Shares issued | 750.00 | 750.00 | 750.00 | 350.00 | 350.00 | 350.00 | 0 | |
| Remaining debt | 167.7 | 167.7 | 167.7 | 167.7 | 167.7 | 167.7 | 0 | |
| | | | | | | | | |
| Total Shares in each option | 987.90 | 987.5 | 987.5 | 587.9 | 587.9 | 587.9 | 237.90 | |
| | | | | | | | | |
| | | | | | Option 4 = Accept both deals. | |
| RBC Global gold Average current P/E multiple from lates weekly gold tables | | 25c minus 10m loan from Gold One. Which is around 4c. So 21 c if we are lucky and there are no escrow charges. | |
| | 2011 | 2012 | 2013 | | |
| Tier 2 | 19.8 | 13.4 | 9.7 | | |
| Tier 3 | 24.6 | 10.5 | 5.9 | | |
| | | | | | No thank you!!! | | |
As you can see, the correct course of action is to vote no, unless they will buy back some of the notes first and cancel them. Otherwise we vote no to both deals.
I'm going to email Dion and present my option. Hope he listens. Otherwise we should get the shareholders list and put out our own communicaitons list presenting our opposition to the deal. With 25% plus shares unable to vote. AGA, Village, Franco Nevada, we have a good chance to stop this. We should also see how many shares we have just here. I'll post on that in a little seperatly.