Oromin Explorations Ltd OLEPF

RE: RE: RE: RE: Teranga may be the short term answ

[tony1969]

Hey GF.  The ultra conservative $425 million dollar buyout in my example is for the entire Oromin Joint Venture Group.  All 3 parties.  The fact that TGZ already own about 14% of (public) OLE means that they have a huge advantage over other bidders.  I am trying to keep this simple because  we have to realize that TGZ owns 14% of the 43.5% of the project.  With $185 million in stock or cash or both they can purchase the 131.9 million shares of the (public) OLE they do not own for $1.40 per share.

I am looking at this deal from the point of view of the amount a buyer is willing to pay for the entire property then simply doing the 43.5,43.5 and 13% math.  I am not look at it like the 3 parties having 350 million shares. I am saying that with 190 million TGZ shares they can make a $425 million dollar bid for the whole 100% JV. 

TGZ can also finance part of the deal.  It has zero debt and an upgraded mine that can produce 400k ounces per year that can be used as collateral.  They will be done paying off their hedge soon and will probably be producing 200k ounces in 2013.  Their cash flow should be enough to get a substantial loan.  My amateur guess would be around $250 to $350 million.  That combined with stock can easily push the buyout price to lets say $550 to $750 million or $1.80 to $2.47 per share again using the 131.9 million shares they do not own.  That higher figure would be nice.

The stake TGZ took in OLE a while back I do not believe was for an investment.  I believe that they would have bought more if OLE let them.  They have been planning this for a while and Chet is probably bouncing their offer against other bidders to try to maximize a good price.  All just my opinion and thanks for your response GF.  Comments?