HK Exchange: A Human Translation I'm lucky enough to know some good people in Taiwan, so I skyped them this evening to go over the article to give a better translation and help with understanding. Keep in mind this may not be verbatim, but this gives a much better view and understanding:
->Majestic Gold, a TSX listed company holds 75% of the Song Jiagou project and is considering listing on the Hong Kong Exchange to enhance its valuation. Majestic Gold intends to raise money for future acquisitions (mainland China and overseas). The total IPO would be a total of $ 60 million to 100 million Canadian dollars (about 466 million to HK $ 777 million) for future acquisitions of gold mining projects.
-> Majestic Gold is headquartered in Vancouver, is a TSX listed and Franfurt Exchange listed company and holds 75% of the Song Jiagou Project. In March, used Quam IR to introduce the company to potential investors in Asia.
-> Majestic's chairman and CEO, Rod Husband, in an interview in Hong Kong, pointed out that the company is in Hong Kong to meet with investors and that he could only say these are "close to being complete". "Listing in Hong Kong will improve visibility and investor attention and it is believed that if shares were to be traded in Hong Kong, valuations would increase by 30%." (Personal comment - I would think much more).
With the strategic investors, the company intends to raise between $20M and $40M CAD through the pre-IPO, with an additional $40m to 60m through an IPO. (Personal Notes: this is why above notes $60m to $100M )
By listing in Hong Kong, Majestic Gold can get a higher valuation and assessment of the project. This higher valuation can also help to increase its M&A strength. Majestic gold has retained Deloitte to deal with interested parties. He stressed there are a range of different options and listing on the HK Exchange can occur through IPO or M&A of companies already listed. The manner in which to list depends on the company's strategy and their timeframe, which are considerations.
An IPO would be a cleaner way to get listed as investors have a better understanding of the company's situation - straight up gold company, but IPO's can take 6-12 months. Mergers and Acquisitions with currently listed companies can be beneficial because the timeframe to list can be shortened by 6 months, but, some current shareholders of the merging company may not want to invest in ambitious gold projects or in the mining space (basically, IPO is cleaner as it is one business, whereas a merger is two or more, and may have different views by shareholders).
This is the best we could do. Hope it helps. Take is as it is - a translation over skype. it is not easy to translate this sort of thing and be 100% correct, so take it as 90% accurate or so..
B