If we assume that Gold One would counter the bid, and we get around 150M then here's how everything plays out...
- we pay off our debt due June 2012 with the EZ proceeds
- we have abour 160M in debt due 2013
- we have MWS - run it for about a year at 98,000 ounces * $1640 (gold price) = $160 720 000.
current cash costs = on 98,000 ounces = 58 800 000
For a total year profit of $101,920,000
Pay off the majority of the 2013 debentures, refinance the remaining 60 odd million, pay off the 60M debt by 2014, and by the third quarter in 2014 we will have no debt with 100M profits.
Or just run MWS for a year, pay off the majority of the debt in 2013, and then sell MWS for 400M+, we would have to pay about 60-70M back of the remaining 2013 debt, and shareholders would get a minimum of 320M, 320/237 = 1.35/share.
Now let's assume that we only get around 100M of EZ (we accept the new counter bid, which I put around 100M), 7%/year interest on the remaining 50M EZ debt = 53.5M(EZ debt plus interest) +60M(remaining 2013 debt after we use MWS profits to pay off 100M) = 110M debt due June 2013. MWS sale for 400+M. Shareholders receive 290M, 290/237= $1.22/share.
OR and this is hilarious...MWS sold for 335M in 2013 (the current low ball bid of AngloGold), 335M - 110M reminaing debt = 225M. 225/237 = 0.94/share
If management is not interested in following this path then they should just resign and allow someone who is willing to guide us to profit through the next few years to take over. Because now that we have this counter bid, it's simple.
I am sick of whatever is going on in SA with current management. There is a simple and clear path in front of us. Gold prices are forecasted to increase between $1800-$2000 within the next year by every notable analyst, and with only MWS to focus on I'm willing to bet cash costs can be reduced. I came up with this in the last 15 minutes, why can't FIU management just do it. Period.